Cardano Balance Drops to Record Lows – To Trigger an ADA?

• Despite recent network upgrades like the Ouroboros Leios update and the Voltaire era’s first hard fork, Cardano’s (ADA) price faces mixed signals.
• Large investors holding over $1 million worth of ADA have reduced their positions by 18%; however, the positive market sentiment is providing much-needed support.

Cardano (ADA) continues to face headwinds even as the broader crypto market shows signs of recovery after the 50 bps Fed rate cut. Recent network upgrades, including the Ouroboros Leios update, have provided a boost to the ecosystem. However, key metrics for ADA price show a mixed picture.

The ADA price rose by 4.37%, reaching $0.3695 at press time on Tuesday. This rise follows the announcement of the Ouroboros Leios upgrade, which aims to improve Cardano’s transaction throughput. Moreover, the upgrade will enhance the network’s speed to over 1500 transactions per second (TPS).

In addition to the Leios upgrade, the network successfully implemented the first hard fork of the Voltaire era. It also introduced on-chain voting and community-based governance. In addition, the Cardano Governance Workshop is also preparing for the V2.1 update. Also, the network has achieved a key milestone by proceeding with a total of 96 million transactions to date, reported CNF.

Next month, Cardano co-founder Charles Hoaskinson is set to meet Argentinian President Javier Milei to take the crypto revolution ahead in South America, per the CNF report. The ADA community is already celebrating this development.

Declining Whale Interest for Cardano (ADA)

Despite these positive technical developments, several key indicators suggest that ADA prices could still face significant challenges. One of the most concerning trends is the decline in balances held by investors. Over the past month, the percentage change in ADA balances has consistently been in the negative, particularly for large investors.

Small traders holding less than $1 worth of ADA saw a slight increase of 0.23%. However, larger investors, i.e., those holding more than $1 million worth of ADA, have collectively reduced their holdings by up to 18%. This decline in whale activity is notable, and whale exit from ADA could indicate trouble ahead, especially if this trend continues.

ADA Price Technical Signals Offer A Ray of Hope

Despite these challenges, technical signals suggest a potential price breakout for ADA. Since early August, the ADA/USDT trading pair has been consolidating within a symmetrical triangle pattern, which has been characterized by multiple failed attempts to break through both the upper and lower trendlines.

So far, the price has been rejected three times at each of these levels. At the time of writing, ADA has been rejected once again at the upper trendline. However, the possibility of a breakout remains, particularly as positive sentiment builds across the broader cryptocurrency market.

If ADA can break through the upper trendline and confirm the move with a successful retest, it could follow the bullish crypto market. Conversely, if ADA forms lower highs and lower lows, its price may continue to decline. Moreover, the risk is higher, especially as the Relative Strength Index (RSI) shows a bearish divergence for ADA.

Meanwhile, one promising sign for Cardano (ADA) is its open interest (OI)-weighted funding rate, which currently sits at 0.0097%. This positive rate suggests that traders are willing to pay to maintain long positions. It indicates unwavering investor confidence in ADA’s future price potential, per the CNF report.

However, additional factors will need to align for ADA price to fully reverse its bearish trend. These include increased trading volume and continued support from the crypto market.