Over the course of 2023, Cardano’s (ADA) movement has been more on the bullish side. Despite the reversal in recent weeks, the bullish momentum has not completely died out. The most interesting thing about this trend, however, is the fact that the smaller investors seem to be the main driver, not the big whales.
Cardano Small Investors continue to grow
Over the course of 2023, the smaller Cardano investors led the way in ADA accumulation. This can be seen from January through May, where their collective wealth has continued to rise. These investors with between 1,000-10,000 coins and 10,000-100,000 coins have been growing steadily over the past six months.
Where the whales tended to sell rather than buy, these private investors were heavily on the buy side. As a result, their collective property has grown from approximately 17% of the total supply to more than 18.1%. As a result, these smaller wallets holding between 1,000 and 100,000 coins now account for 6.29 billion of the total supply of 34.79 billion.
Their accumulation trend also coincides with the rise in the price of ADA over this period, as illustrated in the chart below. There were dips in their positions where there was presumably some profit taking. However, the overall trend continued in an upward direction, taking their positions to new highs.
Small ADA holders increase holdings in six months | Source: Santiment
During this time, holdings of larger investors with between 10,000,000 and 100,000,000 coins dropped dramatically. This suggests that while the smaller holders were responsible for the price increase, the larger holders were the culprits behind the price crash, as their total holdings went from 12.1% of total supply to 11.11% in April.
What will spark the next ADA rally?
Currently, the price of ADA is still low, which suggests that investors are very hesitant to buy the token. However, if the accumulation trend among smaller wallets continues, there could be even more upside potential. An added benefit of small wallets leading the accumulation trend is that it allows for wider distribution of the token which helps sustain bull rallies.
ADA is still seeing significant resistance at the $0.38 level, but since bears are still weak at this point, the inability to beat this resistance could be explained by the overall low momentum in the market. When Bitcoin price rises again, $0.38 will be quickly surpassed with the next key level at $0.4.
At the time of writing, ADA is changing hands at a price of $0.37. It is down 0.21% on the 24-hour chart but saw a 1.73% gain on the weekly chart.
ADA price trending at $0.37 | Source: ADAUSD on TradingView.com