On-chain data shows that Cardano whales have had their most active week in nine months. Here’s what this could mean for the asset’s price.
The number of Cardano whale transactions has recently increased
According to data from on-chain analytics firm VirtueThe last time similar whale activity was observed was in May 2022. The relevant indicator here is the “whale transaction count”, which tells us the total number of Cardano transfers that have occurred on the network that at least include the movement of ADA. $100,000 in value.
When this metric has a high value, it means that whales are currently conducting a large number of transactions on the blockchain. Such a trend shows that these humble holders have an active interest in cryptocurrency trading right now.
In general, the activity of whales can be something to watch, as the movements of this cohort can have the power to make visible changes in the market on a large scale. Therefore, whenever there are high values in the number of whale transactions, the asset may experience some high volatility in its price.
Now, here is a chart that shows the trend in this Cardano indicator over the past few months:
Looks like the value of the metric has been pretty high in recent days | Source: Santiment on Twitter
As shown in the graph above, the number of Cardano whale transactions has been at very high values during the past week. In fact, the previous week was the most active for this group nine months ago, between May 11 and 17, 2022.
Interestingly, in the previous example, ADA price saw a 36% rally between the start of the week of high whale activity and the local top in early June (which was the following month).
It is possible that the price of Cardano could feel a similar constructive effect as a result of the current week of high whale transactions. However, this is far from a certainty.
The reason behind this is that the indicator does not differentiate between sell and buy transactions, so the current high activity may be dominated by distribution from whales, which may provide a bearish effect on the price.
In the chart, Sentiment also shows data for the “ADA Supply Distribution” metric for addresses holding between 1 million and 100 million ADA. Supply distribution measures the total number of addresses that are currently holding a number of coins that fall within a range (which is 1 million to 100 million ADA in the current case).
A total of 36 new addresses seem to have appeared in this category since the beginning of the year, which may suggest that there has been some accumulation in the market lately.
Earlier during the rally, the metric had seen a drop in value, but over the past few days, there has been some renewed growth, indicating that at least some of the current high Cardano whale activity is actually for accumulation purposes. May be taken.
At the time of writing, Cardano is trading around $0.3975, having gained 4% in the last week.
ADA seems to have been trading sideways recently | Source: ADAUSD on TradingView
Credit : www.newsbtc.com