Cardano’s ADA network is currently grappling with obstacles, while other cryptocurrencies are making strides to recover, despite the highly anticipated release of the Ouroboros Leios upgrade.
Within the last 24 hours, Cardano’s price has inched up by 2.21%, reaching $0.3558 at the time of writing.
This surge follows the unveiling of the Ouroboros Leios upgrade, aimed at boosting Cardano’s transaction speed to more than 1500 transactions per second (TPS).
In addition to this, Cardano recently completed the initial hard fork of the Voltaire era, ushering in community-driven governance and on-chain voting. As the Cardano Governance Workshop gets ready for the V2.1 update, the network is witnessing growth, clocking in at 96 million total transactions.
Despite these positive advancements, several key indicators for ADA are displaying unfavorable trends.
Decreasing holdings balance
One worrying metric revolves around the decrease in holdings balance when measured in USD. The alterations in the balances held have consistently veered into negative territory, with this pattern continuing into the current month.
While small traders with less than $1 worth of Cardano noted a slight 0.23% uptick, the decline in holdings across other brackets is significant.
Notably, large investors carrying over $1 million worth of ADA saw their combined holdings drop by up to 18%. This suggests that whales, influential players in any cryptocurrency ecosystem, are exiting ADA, potentially indicating trouble ahead.
Is ADA ready to break free from its symmetrical triangle?
Despite the seemingly dark scenario for Cardano, there are glimmers of hope. The price action of ADA within the symmetrical triangle formation hints at a potential breakthrough in the offing.
Since August 5th, the ADA/USDT pair has been stuck in a consolidation phase, with both the upper and lower trendlines refusing to allow a breakout on three occasions.
However, the rejection at the upper trendline as of now might eventually give way, spurred by the growing momentum across the broader cryptocurrency landscape.
If ADA manages to breach the upper side and confirms this with a retest, it could mirror the positive trajectories of other digital assets.
Conversely, should ADA break out forming lower highs and lower lows, it may prolong its decline, particularly as the RSI Divergent indicator remains bearish for ADA.
Encouraging funding rates offer hope
Another optimistic development for ADA is the positive OI-weighted funding rate, currently standing at 0.0097%. This signifies that traders are willing to pay to uphold long positions, indicating confidence in ADA’s potential for upward price movement in the future for long-term holders.
Nevertheless, for ADA to witness a complete price reversal, other factors need to align, including a sustained uptick in ADA’s trading volume and support from the broader cryptocurrency market.
Should these conditions be met, Cardano could potentially enjoy a bullish price trend, buoyed by favorable funding rates and an overall recovery in the market.
While Cardano is facing significant hurdles such as a decline in whale holdings and challenges in breaking through crucial price patterns, there are still catalysts that could propel ADA to higher levels.
Positive funding rates, potential breakouts, and a market rebound could help ADA regain momentum and paint a brighter price outlook.