Cardano (ADA) Sees Decline in Holders Despite Chang Hard Fork Optimism

Cardano (ADA) is gearing up for a major upgrade. As the smart contract blockchain prepares for the event, some ADA holders are taking drastic measures that could impact the cryptocurrency’s price.

However, this time, it is not the small fishes on Cardano’s network who are making crucial decisions. This analysis tells the full story and more about the token’s price potential in the coming weeks.

Cardano Experiences Large Holders Exodus Amid Positive Sentiment

According to IntoTheBlock, Cardano has witnessed a staggering 99.79% decrease in its Large Holders Inflow. This metric measures the flow of funds into addresses belonging to investors holding substantial amounts of a cryptocurrency.

A spike in this metric indicates strong buying activity, and sometimes, it is a prerequisite to erasing the correction a token may have experienced. 

However, when inflows decrease, as they do with ADA, it implies that notable investors are letting go of previously owned assets. This indicates decreasing confidence in the crypto, especially if it drops by approximately 100%. 

Read More: 6 Best Cardano (ADA) Wallets You Should Consider in July 2024

Cardano Large Holders. Source: IntoTheBlock

While the reasons for this liquidation remain uncertain, chances are likely that it is part of a portfolio rebalancing ahead of a potential altcoin season.

Another reason could be the upcoming Chang hard fork, which is expected to be complete by the end of July. In crypto, a hard fork is a comprehensive change in the programming of a blockchain.

Cardano has undergone a series of upgrades recently. But the last major one was in 2021. During that period, ADA’s price went from $1.35 to $3.10 within 30 days. Are holders expecting a rerun of the performance?

On-chain data shows that market participants are becoming optimistic about the project. This is because of the Weighted Sentiment rating. 

Cardano Weighted Sentiment. Source: Santiment

Though the rating remains negative, today’s sudden spike to the upside seems to be associated with a rising bullish perception of the blockchain and its native cryptocurrency. 

Should the sentiment eventually cross into a positive region, it can spark demand for ADA, which could later prevent it from sliding below $0.40.

ADA Price Prediction: South Is Not the Only Way

According to the 4-hour chart, ADA traded within a falling wedge between March and June. A falling wedge is a bullish pattern that occurs when the price of an asset declines over a period of time and later breaks out of the swing low once buyers take advantage to scoop up more tokens at lower values.

Analysis shows that the pattern broke out on July 6, as ADA climbed back to $0.45. Recently, the price has been in a range-bound region of $0.40 and $0.45. 

However, indications from the Chaikin Money Flow (CMF) and the Moving Average Convergence Divergence (MACD) reveal that things may change. The CMF identifies trends that signal accumulation or distribution.

If the reading increases, accumulation is present, while a decrease shows distribution. At press time, the CMF is rising, indicating that buying pressure could help the price bounce.

Cardano Daily Analysis. Source: TradingView

In addition, the MACD, which shows the relationship between two moving averages to measure momentum, aligns with the forecast as it is positive. 

If momentum improves, the indicator can help accelerate ADA’s upswing. If this is the case, the price of ADA may hit $0.43 and probably rise to $0.47.

Read More: Cardano (ADA) Price Prediction 2024/2025/2030

Cardano Daily Analysis. Source: Santiment

However, this prediction may not come true if the large holders continue to decrease their ADA holdings. If this happens, the price of the token may drop to $0.39.