Cardano (ADA) Token Continues Uptrend Despite Slight Hiccup, Upcoming Chang Update Might be Related

Cardano's ADA token continued its uptrend despite a slight hiccup on Aug. 7. The token spiked nearly 5% on Aug. 8 to reach a daily high near $0.34.

Cardano’s ADA token price rallied on Aug. 8, thanks to the upcoming Chang hard fork update and on-chain metrics revealing an accumulation trend among large ADA holders. However, the technical analysis presents a bullish outlook that might be difficult to achieve due to strong bear presence at higher levels.

ADA Price Analysis

ADA price showed a strong bullish momentum on Aug. 8, rising nearly 5% to reach a daily high around $0.34. The token encountered some resistance at higher levels, evident from the long upper wicks on the recent daily candles.

This indicates the presence of bears around the 0.5 FIB retracement level near $0.335, making it a crucial point for further price action. ADA price is currently trading within a bullish technical pattern known as the ‘falling wedge.’

A breakout from this pattern usually signals a bullish trend continuation. However, given the recent price action and the strong bear presence at higher levels, a breakout seems unlikely in the near future.

If the bulls manage to overcome the resistance and initiate a rally, ADA price would need to move above the resistance near $0.35 before targeting the 20-day EMA (red) resistance around $0.375.

On the other hand, if the ADA/USD pair fails to start a rally, the Cardano token would likely face a drop to the support level near $0.32. Failure of immediate support could send ADA price plummeting to the support around $0.3 before recovering.

ADA on-chain metrics

Recent data from Santiment showed an accumulation trend among large ADA holders, while smaller investors seem to be distributing their holdings.

Large holders, defined as those with over 1 million ADA, showed a slight increase in the number of addresses and a consistent rise in supply, indicating strong confidence in ADA's long-term potential.

Mid-large holders, those with over 100,000 ADA, maintained stability in address numbers while steadily increasing their holdings.

However, mid-sized holders, defined as those with balances above 10,000 ADA, presented a mixed picture. The number of addresses slightly decreased, but the overall supply rose, suggesting some distribution but also significant accumulation by remaining holders.

Finally, smaller holders, defined as those with over 1,000 ADA, exhibited a marked decline in address numbers but a noticeable increase in supply, indicating that while some smaller investors are selling, others are accumulating more ADA.

On the other hand, the declining MVRV ratio, now at -0.548, indicates that many ADA holders are at a loss, reducing the likelihood of significant sell-offs.

Furthermore, whale transactions, defined as transfers exceeding $100,000, have decreased recently, suggesting reduced activity from large investors. This combination points to a cautious market sentiment with limited sell-off risk but also a lack of strong buying signals from major investors.

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