Can Cardano’s Chang hardfork spur ADA’s price action again?

• Cardano readies for the first phase of its Chang hardfork. 
• We explore what ADA price and on-chain data reveals about the state of demand.

As Cardano [ADA] prepares for its highly anticipated Chang hardfork, the crypto community is abuzz with speculation. So, lets dive in and look at what the excitement is all about and the possible impact on ADA’s price action.

Before we dive into the Chang hardfork, it is worth noting that this is not the first Cardano hardfork. That designation is for the Shelly hardfork in 2020, which allowed the network to become decentralized.

There were other hardforks over the years. They include the Vasil hardfork in 2022, and the more recent Alonzo hardfork in 2023 which enabled smart contracts.

The Chang hardfork will allow the Cardano network to implement a distributed governance framework. This will transition the network to a governance model that is fully community controlled.

The key benefit of this change is that it will allow the Cardano network to have a more decentralized structure. The latest update on the Chang hardfork revealed that exchanges had started preparing.

Coinbase and Bitfinex were among the first exchanges to initiate the process.

Will the Chang hardfork affect ADA’s price action?

The Chang hardfork is technically purely about implementing changes to the network infrastructure. Therefore, it might not have a direct impact on ADA’s price performance.

Nevertheless, it will represent an achievement in line with Cardano’s roadmap.

Despite the low probability of the Chang hardfork affecting ADA, there might still be some speculation around the event. ADA has been attempting to recover from the sell pressure that it experienced in Q2 2024. It traded at $0.40 at press time.

Source: TradingView

ADA’s sell pressure has been limited especially after its latest retracement in the last 2 weeks. This was evident in the MACD which indicated low selling volume. This outcome that may favor ADA bulls in the first week of August.

The latest on-chain data signals that large address activity dwindled between the last week of June and the last week of July.

Except for a period between 7th and 10th July which coincides with the brief rally that lasted until mid-July. However, large address transactions (over $100,000) are starting to pick up again.

Source: IntoTheBlock

A surge in large addresses activity may signal that whales are cooking up something. However, this observation did not necessarily indicate whether whales were buying or selling.

Further investigation revealed that the number of of HODLers (+1 Year) grew from around 3.13 million to 3.18 million in July.

Source: IntoTheBlock

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Meanwhile, the number of traders dropped considerably during the month. An indication that there was a growing focus on HODLing rather than short-term trading.

Perhaps a sign that ADA bulls might be ready to take charge once again.