Will Cardano regain large holders’ trust as gains decline

• The number of large holders decreased amid the concerning decline in the token value.
• Market participants were beginning to trust a bullish outlook as indicators slightly supported the sentiment.

Cardano’s [ADA] 41.66% 365-day decrease could be the least of holders’ worries despite its strides in development activity. Besides that, and its 90.78% drawdown from its All-Time High (ATH), the number of ADA large holders has reduced.

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Hopes on the long haul

According to IntoTheBlock, ADA’s concentration by large holders had fallen to 32%. This decline suggests that whales’ confidence in the token could be withering. This was especially as 30.15% of large transactions have produced bearish outcomes in recent times.

Source: IntoTheBlock

Expectedly, the price performance has ensured that only 8% of ADA holders were in gains. With only 2% at the breakeven point, 88% have had to deal with losses. So, what hope do current holders have?

Well, the four-hour ADA/USD chart showed that the token could continue to linger in the bearish state in the short term. This was because the 50 EMA (yellow), despite being close to the 20 EMA (blue) was above the latter.

Usually, a circumstance of this nature indicates a possible bearish dominance. But for holders who still seem committed to ADA, respite could be on the way. This was due to the fact the 200 EMA (purple) was above the 50 EMA.

Typically, this signals that ADA has the tendency to establish a new uptrend, which could, in turn, translate to a sustained rally. 

Meanwhile, the Know Sure Thing (KST) indicator showed that ADA’s downward momentum could be growing. Thus, opening long positions at the token’s press time price could mean preferring less profitable trades.

Source: TradingView

Revival may not be far off

Despite ADA’s underwhelming price action, Santiment rated Cardano as one of the projects with impressive traction lately. 

Furthermore, the on-chain analytic platform also showed that ADA’s weighted sentiment has improved. Up until 9 June, the weighted sentiment was -3.057. 

Weighted sentiment takes into account the unique commentary about a project on social platforms. When the metric increases, it means optimism has returned, as was the case with ADA.

Read Cardano’s [ADA] Price Prediction 2023-2024

But when it reduces, it means that the average comments were pessimistic. Another metric worthy of assessment was the funding rate on Binance. Funding rates are periodic amounts of an asset paid between long and short traders based on the difference between perpetual contracts.

At press time, ADA’s funding rate was -0.006%. This usually occurs when the average margin trend is negative. Therefore, traders holding positions opposite to the prevailing market trend receive a fee from those aligned with the trend.

Source: Santiment