Crypto Whales Sell $326M in Cardano After Hard For

Cardano’s Price Struggles After Chang Hard Fork

Cardano’s price is currently facing challenges, with a potential breakout from its descending wedge pattern possibly delayed due to unfavorable market conditions. This overvaluation, combined with a lack of confidence from large investors, suggests that Cardano may need more time to recover after the recent Chang hard fork.

Overvaluation and Investor Skepticism

The Network Value to Transaction (NVT) ratio, a key metric used to assess the value of a cryptocurrency relative to its transaction volume, indicates that Cardano is currently overvalued. The NVT ratio for ADA has reached a yearly high of 6.43, signaling potential trouble ahead. Overvaluation is typically a bearish indicator, as it often leads to corrections or delays in expected rallies.

In addition to the technical indicators, support from major investors is notably absent. Crypto whales, who play a crucial role in driving price movements through their accumulation or selling, have recently shown little interest in holding ADA. Over the past ten days, these large wallet holders, who control between $100,000 and $1 million worth of ADA, have sold off a significant portion of their holdings—amounting to over $326 million, or about 15% of their supply.

This sell-off, which followed the Chang hard fork event, aligns with the ‘sell-the-news’ phenomenon, where investors capitalize on the hype leading up to major developments but sell once the event occurs. This strategy often results in market corrections, as the initial excitement fades and token prices decline.

Future Outlook: Potential Recovery or Further Drawdown?

While the immediate outlook for Cardano’s price is uncertain, a recovery could be on the horizon. The altcoin has spent over four months within a descending wedge pattern that began in mid-April, and although it is likely to break out eventually, the timing remains unclear. For now, Cardano’s price may drop further, possibly reaching a key support level around $0.31, which has historically served as a crucial floor.

If Cardano’s price recovers from this support, it could help the cryptocurrency break out of its current pattern, potentially leading to a 47% rise. However, if the broader market conditions and investor sentiment do not improve, further declines are possible. This would invalidate the bullish-neutral outlook and could extend the delay in Cardano’s expected breakout.

The situation underscores the importance of investor confidence and market conditions in driving cryptocurrency performance. As Cardano navigates these challenges, traders and investors will need to monitor key indicators and market movements closely to anticipate the next phase in ADA’s price trajectory.