Cardano ADA surges 47% as whales accumulate 220 million coins

Cardano’s native cryptocurrency, ADA, has experienced a significant surge, increasing by 47% over the past week. This substantial price rally comes amidst a backdrop of increasing whale accumulation and a shift towards long-term holding among investors, indicating a strong confidence in the asset.

According to data from Santiment, whales holding between 10 million and 100 million ADA coins have significantly increased their holdings over the past week. During this period, this cohort of whales has acquired 220 million coins, valued at over $192 million at current market prices. At the time of reporting, this group of large investors collectively holds 12.74 billion ADA, marking their highest accumulation in six months.

When whales increase their holdings, it drives upward price momentum by reducing the available supply in the market. This trend may also trigger FOMO (fear of missing out) among ADA retail investors, leading to increased buying pressure and further price appreciation.

Additionally, on-chain data has shown a notable increase in ADA’s average holding time among investors over the past week. This suggests a shift towards long-term conviction rather than short-term trading for quick profits. According to IntoTheBlock, the holding time of all ADA coins transacted over the past seven days has increased by 78%. The holding time of an asset’s transacted coins tracks the average duration tokens are kept in wallets before being sold or transferred. Longer holding periods such as this reduce the selling pressure in the market and reflect stronger conviction among ADA holders as they choose to keep their coins rather than sell them.

On the daily chart, ADA’s rising on-balance volume (OBV) confirms the surge in demand. This is currently at 52.56 billion, climbing 2% since March 1. This momentum indicator tracks buying and selling pressure by adding volume on up days and subtracting it on down days. When it rises during a rally, it signals strong buying demand, suggesting the price increase is backed by strong demand and may continue. If ADA’s price uptick continues, it could break through the resistance at $0.94 and trade at a three-month high of $1.32. On the other hand, if demand falls, ADA’s price could fall to $0.72.