31 October 2023
Cardano (ADA) may be turning bearish once more after whales began moving again. This activity was brought to light by the on-chain data tracker Santiment which showed unusual activity in dormant ADA wallets after the price crossed $0.3.
Cardano Sharks And Whale Start Moving Coins
In the report that was posted on X (formerly Twitter) by the on-chain data tracker, Cardano shark and whale addresses (that is addresses holding between 100,000 and 10 million ADA on their balances), as well as old coins, have been showing a lot of activity.
Most of this activity could be detrimental to the current ADA recovery given that these large holders have been moving their previously dormant coins. The Santiment report shows that old ADA coins are moving back into circulation once more.
It showed that the crypto just marked its largest day of old coins being moved around. The last time that this metric was this high, as pointed out by the tracker, was back in April 2022, and historical performance does not spell good news following this.
What Happened To ADA Price Last Time?
Back in April 2022 when a similar volume of old coins began moving back into circulation, it spelled doom for the ADA price. Looking at the chart in 2022 shows that ADA had finished out the month of March strong at a price of $1.21. However, once these coins began moving, it was game over.
April 2022 saw the ADA price fall from $1.21 to $0.8 before the month was over, meaning a 33% drop in price. The downtrend would carry on into the later part of the year and by December 2022, the ADA price had fallen as low as $0.24.
If this were to repeat itself, then another 30% drop would send the ADA price below $0.1 in the coming month. This would take the price back to September 2020 levels. However, it is not all bad news for the digital asset given the activity of sharks and whales.
In the same report, Sentiment revealed that Cardano sharks and whales have been buying up ADA rapidly. They had bought a total of 43.71 million ADA in the space of two weeks, now worth more than $131 million at the current price. This suggests bearish sentiment is limited given that large addresses are still accumulating coins.
At this rate, whatever is being dumped on the open market by the dormant wallets will be picked up by the sharks and whales. As long as demand continues to match supply, then the sell-off could have next to a negligible effect on the price of ADA.