Key Insights:
- Cardano crowd sentiment retreats to 5-month lows.
- Whale demand for ADA has been rising in the last 2 days.
- Clarity Act recognizes Cardano among the top 3 networks likely to mature under U.S standards.
Is Cardano’s native coin, ADA, preparing to bounce back? New data revealed that crowd sentiment around Cardano has been declining, which underscores a bearish outlook.
ADA price retreated by almost 20% from its August top to its $0.82 press time price tag. But, despite this, it still managed to conclude August on a 9% price premium.
Analysts have been eyeing ADA for a potential recovery now that altcoins have been gaining more attention. However, recent data revealed that market sentiment around Cardano dipped to a 5-month low.
The bearish sentiment indicated that short-term retail buyers were losing patience. However, this outcome could set the pace for long-term buyers to buy ADA at discounted prices. An outcome that could potentially lead to a robust recovery.
ADA price action recently retested a short-term ascending support that was part of a wedge pattern. This also raised the possibility of a short-term bounce back from the same support level.
ADA’s MFI also registered an uptick since the end of June, confirming liquidity inflows from smart money.
Is Cardano Demand on the Rise?
On-chain data aligned with the above observations. For example, large orderbook flows leaned in favor of ADA bulls in the last 2 days. The cryptocurrency received about $8 million in spot inflows from Binance whales during the same period.
Spot inflows were also observed across Coinbase and OKX, but in limited amounts. Whales also demonstrated bullish sentiment in the derivatives segment.
Over $51 million worth of derivatives demand was observed from whales on Binance and just over $12 million on OKX.
The sentiment improvement was reflected in ADA’s open interest, which jumped from $1.56 billion on 1 September to $1.62 billion in the last 24 hours.
Despite this gain, the spot flow data revealed that the cryptocurrency still had more outflows than inflows. Derivatives volumes were still significantly low compared to levels observed near its mid-August peak.
Although demand for ADA was still relatively low, the fact that whale activity signaled accumulation was a healthy sign. Moreover, there were a few other recent developments that underscored positive news for the Cardano network.
Cardano Scores Major Wins that Could Pave the Way for More Adoption
Cardano has no doubt lagged behind its bigger and more popular rivals, especially Ethereum and Bitcoin, in terms of adoption. However, that might change soon thanks to the U.S government.
The U.S has been pushing aggressively towards crypto regulation and adoption. The spotlight is now on the blockchains likely to align with those efforts.
Interestingly, the U.S reportedly has targets on three major blockchains in that regard. The Clarity Act recently highlighted Bitcoin, Ethereum, and Cardano as the blockchains likely to mature under strict U.S standards.
This could shift the spotlight back on the Cardano network, especially now that attention is leaning more towards stablecoins. However, this was not the only win that Cardano secured this week.
Cardano has been under investigation for alleged misconduct. The investigation, which kicked off in May, put the network on the spot with allegations claiming ADA misappropriation by insiders, and upgrades aimed at preventing token redemptions, among others.
A fresh update revealed that the investigation has finally concluded in favor of Cardano. None of the allegations stuck, clearing the network of any previously alleged wrongdoing.
Although Cardano is off the hook, it still has to contend with relatively lower levels of adoption compared to Ethereum and other top networks. However, the Clarity Act could be the wild card that may boost ADA’s credibility.