Cardano (ADA), the proof-of-stake blockchain network known for its smart contracts, has defied recent predictions of a drop from the top 10 cryptocurrency rankings by market capitalization.
Surprisingly, ADA has instead become the best performer among the major coins, up 7% in the past 24 hours. This price action has fueled discussions about ADA’s potential to relive the glory days of 2021, when it peaked at $3.10.
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A Tale of Two Whales: Retail Accumulation vs. Profit taking
The recent price increase can be attributed to two key factors: a surge in buying pressure and a possible upcoming ‘battle of the whales’.
On-chain data shows that retail investors, the so-called “whaley” masses, have aggressively built up ADA, especially between $0.48 and $0.50. This large group of buyers could act as a support system if the price reaches that level.
However, hiding under the bullish sentiment is a potential obstacle. Data shows that only 40% of current ADA holders are making a profit.
A price increase to $0.49 could be particularly significant as it could bring the percentage of loss-making holders below 55%. This milestone could lead to further buying pressure as more investors see an opportunity to move into profit territory.
Whales return? About volume and market cycle
Cardano’s prize The rally is also fueled by a significant increase in trading volume, which is hitting a weekly high of $461 million, according to Santiment. This increase in activity signals growing interest in ADA, which could drive the price up further.
But can this momentum be maintained? The answer could lie with the “original whales,” the big investors who own a significant portion of the cryptocurrency.
Interestingly, ADA’s current distribution shows some similarities to market conditions in 2021, when the price reached $3. At the time, whales accounted for about 6% of the total supply. Today that figure is almost 7%, indicating potential returns from these major players.
However, analysts warn that the success of this ‘whale comeback’ story depends heavily on the broader market cycle. If the current bull market reaches its peak, ADA’s price growth could be limited, hindering ADA’s ability to return to all-time highs.
Can ADA defy the odds?
Cardano’s recent price increase has created a sense of cautious optimism in the cryptocurrency community. While strong buying pressure from retail investors and the potential return of whales are positive signs, the profitability of current holders and the unpredictable nature of the market cycle pose challenges.
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In the coming weeks, it will be crucial to observe whether ADA can overcome the selling pressure at $0.49 and maintain its upward trajectory. If trading volume continues to rise alongside the price, and if the current bull market continues, ADA could surprise everyone and return to the long-awaited $3 mark once again.
Featured image from Pexels, chart from TradingView