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There have become more whales on the Cardano
Analysts noticed that since Dec. 30, the value of the ADA [native Cardano token] has risen 30% (from $0.24089 to $0.3129), after which more new addresses containing $1M or more in ADA appeared online. What influenced the value of the coin and what will happen to it further — we’ll discuss in the article.
The value of cryptocurrency is largely determined by supply and demand. That is, if most of the volume of a particular token is withdrawn from circulation, it will lead to an increase in the price of the remaining coins in circulation.
The rise in the value of ADA came in the first week of January 2023. Experts cite ADA whale activity as the main reason for the bullish rally.
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They found that in November and early December, the value of the coin peaked and stopped rising ($0.3188 at the end of November). In order for it to start rising again, the whales first threw their huge supplies on the market, after which there was an oversupply, from which the value of ADA fell ($0.2482 at the end of December). This affected small players who had previously purchased at a higher price. As soon as the price dropped, the whales started buying again, and with them other market players who had enough money (that’s where more whales came from). Whales purchased and began to hold the coins again; the assets are less in the market, and there is a demand, so the cost rises ($0.3251 currently).
“After dumping 568.4 million coins in the last two months of 2022, whales have now returned 217.2 million ADA,” the study says.
After accumulation, whales often send coins into storage. There are fewer of them on the market, the demand for the token increases, and it rises in value. This is what is happening with ADA right now: Whales’ return to accumulation tactics has triggered a rebound in the token, as small and mid-sized investors have moved into the big players
It seems that investors with 10K to 1M ADA in their accounts imitated investor behavior during the bear market in 2019. Back then, the value of ADA first reached $1.3 and then dropped to $0.33, did not fall below that threshold for another two months, and only then began to rise. Now we are seeing a more rapid effect.
ADA was also pushed by the overall market growth on January 9. Then Bitcoin, Ethereum, and many other altcoins jumped in value. We reported about that here.
As of this writing, Cardano is trading at $0.3155 per coin, down 0,56% from 24 hours ago but up 18,97% from a week earlier. This is the highest seven-day growth rate in the top 15 by market capitalization, according to CoinMarketCap.
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The asset seems to have started the year on a major note, but compared to its historical peak of September 2021, that’s not enough. ADA was $2.96 at the time. Compared to the current rate, the difference is an impressive 838%.
Santiment researchers do not rule out that if the whales continue to expand their stockpile, ADA could rise in value to $3, thus breaking its record.
There are other reasons to believe that the value of Cardano will increase.
Cardano (initial release date: 2017) is a blockchain platform based on the Proof-of-Stake algorithm [a mechanism for processing transactions and creating new blocks in the blockchain]. It is designed to create decentralized applications based on smart contracts.
Mathematician Charles Hoskinson and the cryptographer and Edinburgh University professor Aggelos Kiayias are considered two of the main people on the project.
One of the main differences from other cryptocurrencies is considered to be the presence of a large research community. In 2022, the official group had 230K members. The goal of the project is to create a decentralized system and solve the problems of global financial systems.
The native coin is ADA, which allows community members to vote and make decisions in the ecosystem. In addition, the coin can be set as a coin reward in some cryptocurrency wallets (Exodus and Daedalus). ADA can then be mined and received. For “stacking”
The blockchain strategy consists of five phases. The project is now in its third phase.
The road to the last phase has already been traced. So we’ll soon find out if Cardano can achieve his goal. What do you think about it?
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