Cardano (ADA) Sees Whale Outflows: Why Are Big Players Leaving?

Tue, 26/03/2024 – 14:25

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Cardano’s ecosystem has recently witnessed a notable outflow of ADA held by large-scale investors. While ADA’s market performance is not really affected, things that are happening in the background might affect it directly. 

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Cardano’s price action displays a positive technical outlook as ADA recently ascended above its 21-day Exponential Moving Average (EMA). This technical milestone is often seen as a bullish indicator, suggesting that momentum may be building for further upside movement. The breakout above this particular EMA underscores that the rally is not just sustaining its energy but is, in fact, gaining more strength.

ADAUSDT
ADA/USD Chart by TradingView

Turning to the second screenshot, it presents data on the number of large transactions juxtaposed with the price of ADA. Historically, a high number of large transactions can correlate with increased activity from whales either accumulating or distributing their holdings. 

A declining trend in large transactions, while the price remains somewhat stable or increases, could imply that whales are either distributing their holdings in anticipation of a short-term top or merely rebalancing their portfolios.

Additionally, the chart showcases large transaction volume, which has seen a decline in tandem with the number of large transactions. This decrease in volume might indicate that while the whales are still active, they are executing fewer large-scale transfers, which could suggest a consolidation phase or a temporary reduction in significant market activity.

However, the decrease in whale activity does not necessarily signify a mass exodus from ADA. Whale movements are not always indicative of a loss of faith in the asset’s potential. Redistribution or a strategic repositioning can always be a reason behind a relative exodus of assets. But it is not necessarily a bad thing or something that would directly affect the asset’s market performance.

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