Cardano Under Fire as Holder Behavior Turns Bearish

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Once a crypto darling, Cardano (ADA) now grapples with skepticism. Despite promising updates aimed at boosting scalability and interoperability, the project struggles to shake off the “dead project” label. ADA’s price, currently hovering around $0.31, reflects waning investor confidence.

Holder Behavior Paints a Bleak Picture

Source: Messari

Recent data from Messari and Santiment reveals a troubling trend among Cardano holders. Long-term investors are on the move. Messari’s analysis shows a surge in the 10-year active supply from 31 billion ADA in March to 31.2 billion in July. This uptick suggests holders are repositioning their portfolios, often a precursor to selling.

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The trend extends to mid and short-term holders. The 5-year, 4-year, and 3-year active supplies all show increases, indicating heightened activity. Santiment data corroborates this, with declines in addresses holding between 1 million and 100 million ADA. This redistribution of wealth from mid-tier holders is typically a bearish signal.

Largest Cardano Holders Maintain Staunch Position

While mid and long-term holders exhibit selling pressure, the largest Cardano holders, those with over 100 million ADA, remain relatively stable. This group’s inaction, however, lacks the accumulation typically seen during bullish periods.

Following a 4.5% drop on July 22, Cardano is attempting a recovery but faces stiff resistance. The token is clinging to the 20-day and 50-day EMA support. A breakdown could send ADA tumbling to $0.4, potentially testing $0.37. Conversely, reclaiming the 100-day EMA at $0.45 is crucial for a sustained rally towards $0.49. The RSI remains neutral, offering little insight into short-term momentum.

Conclusion

Cardano’s once-bright future is clouded by bearish holder behavior and price weakness. While the project’s upcoming updates hold promise, their impact on investor sentiment remains uncertain. As the cryptocurrency market evolves, Cardano must deliver tangible results to restore confidence and prevent further erosion of its market position.