Renowned for its smart contracts, Cardano (ADA) the proof-of-stake blockchain network has bucked previous forecasts of a drop from the top 10 cryptocurrency rankings by market capitalisation.
With a 7% increase in the past 24 hours, ADA has surprisingly turned out to be the top performer among big coins. This price action has sparked debates on ADA’s possible return to its peak of $3.10, hence revisiting its glory days.
A Tale Of Two Whales: Retail Accumulation Vs. Profit Taking
Two main causes can help to explain the recent price rise: a possible “battle of the whales” and a rise in buying pressure.
On-chain data shows that, especially between $0.48 and $0.50, retail investors—the so-called “wholly”—mass have been aggressively accumulating ADA. Should the price approach that level, this sizable group of buyers might function as a support mechanism.
But hidden within the positive attitude is a possible barrier. According to data, hardly 40% of present ADA holders make profit.
Given that it would drive the ratio of holders in loss below 55%, a price rise to $0.49 could be especially important. As more investors sense a chance to enter profit zone, this landmark can set off more purchasing pressure.
Whales Return? On Volume And Market Cycle
A notable increase in trading volume is also driving Cardano’s price surge; Santiment reports weekly high of $461 million. This increase in activity shows increasing interest in ADA, which could drive the price higher again.
Can this momentum, nevertheless, be maintained? The “original whales,” the big investors with a sizable share of the cryptocurrencies, could have the key.
Fascinatingly, the present distribution of ADA shares some parallels with the state of the market in 2021, when the price reached $3. Whales accounted for about 6% of the whole supply back then. With that figure almost at 7%, it suggests a possible comeback of these major players today.
Analysts warn, nonetheless, that the success of this “whale comeback” story mostly rests on the larger cycle of the market. Should the present bull market peak, ADA’s price increase could be limited, therefore impeding its capacity to return to its all-time high.
Can ADA Defy The Odds?
The recent price explosion by Cardano has given the bitcoin community cautious but hopeful attitude. Although the great buying pressure from regular investors and the possible return of whales are encouraging indicators, the profitability of present holders and the erratic character of the market cycle present difficulties.
Observing if ADA can resist the selling pressure around $0.49 and maintain its increasing trend will be absolutely vital in the next weeks. Should trading volume keep increasing in line with the price and if the present bull market maintains, ADA may surprise everyone and review its much-anticipated $3 level.
Featured image from Pexels, chart from TradingView