Cardano [ADA]: Why Q1’s strong whale activity may boost investor confidence

• ADA saw strong demand from whales, which underpinned its Q1 rally.
• The largest whales have been taking profits but other whale categories are picking up the slack.

Not so long ago, crypto bears had high favor for Cardano [ADA]. This situation led to heavy losses for hodlers hoping to secure the cryptocurrency at a discount. Now that Q1 is done and dusted, it is important to look back at the changes that have taken place since then.

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One of the most notable changes is a dynamic shift, where whales have been scooping up ADA. It would eventually become discounted enough for whales to pass up, and that may just be what happened at the start of Q1. ADA could have bounced back strongly on the backs of whales accumulating at discounted prices.

But new reports suggest that ADA maintained the strong whale demand in Q1.

#Cardano whales holding 1 million to 10 million $ADA have bought roughly 150 million #ADA over the past month, worth $57 million, shows on-chain data from @intotheblock. pic.twitter.com/2ot5U7pUzY

— Ali (@ali_charts) April 3, 2023

According to recent observations, Cardano whales have been adding inflating their ADA bags in the last four weeks. Addresses holding between 1 – 10 million ADA reportedly added roughly 150 million ADA coins into their holdings. The same amount is worth $60 million at press time market value.

Are ADA whales still bullish?

The above data showed a bullish bias among the whales. This is reflected in ADA’s supply distribution, which revealed that addresses holding between 1000 – 10 million ADA have been accumulating. The same data revealed that addresses in the 10 million to 100 million bracket have been contributing to sell pressure since 26 March. The latter category controls most of ADA’s circulating supply.

Source: Santiment

ADA managed to hold on to most of its gains despite the sell pressure from some of the largest. The subsequent rally pushed the price to a new monthly high. So, what should investors look out for? ADA’s press time price is slightly shy of the next support level at $0.41, where the probability of a reversal would be significantly elevated.

Source: TradingView

How many are 1,10,100 ADAs worth today?

ADA still has some upside potential before it becomes overbought. However, on-chain observations suggest that the tide might be about to change. Transaction volume fell sharply in the last 24 hours. Dormant circulation has been declining since the start of April.

Source: Santiment

A crash in the dormant circulation is an indicator that a large amount exchanged hands. This also reflected the sell pressure from the largest whales. But will it trigger another selloff? The most recent ADA volume spike at the start of this month reflected the sell pressure in the first two days. Its weighted sentiment also slid in the last few days, indicating lower confidence among investors.

Source: Santiment

Despite these bearish observations, ADA’s price action still delivered a 4% upside at press time, confirming that the bulls are not falling asleep at the wheel. Nevertheless, the fact that whale bags have overall been growing is still a good sign.