Will Cardano regain major shareholder confidence as earnings fall

• The number of major holders declined amid the worrying drop in token value.
• Market participants began to gain confidence in an optimistic outlook as indicators provided some support for sentiment.

from Cardano [ADA] 41.66% 365 days of decline may be the least of holders’ concerns, despite progress in development activities. Aside from that, and the 90.78% uptake from the All-Time High (ATH), the number of major ADA holders has been reduced.

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Hope for the long term

According to IntoTheBlock, the concentration of ADA by large holders had fallen to 32%. This drop suggests that whales’ confidence in the token could decline. This was mainly because 30.15% of large trades have produced bearish results in recent times.

Source: IntoTheBlock

Its price performance is expected to have caused only 8% of ADA holders to make a profit. With only 2% at break-even, 88% have had to deal with it to lose. So, what hopes do the current holders have?

Well, the four-hour ADA/USD chart showed that the token could hang in the bearish state in the short term. This was because the 50 EMA (yellow), despite being close to the 20 EMA (blue), was above the latter.

Usually such a circumstance indicates a possible bearish dominance. But for holders who still seem committed to ADA, a reprieve may be imminent. This was because the 200 EMA (purple) was above the 50 EMA.

Usually this indicates that ADA tends to create a new uptrend, which in turn could translate into a sustained rally.

Meanwhile, the Know Sure Thing (KST) indicator showed that ADA’s downside momentum could grow. So opening long positions at the price of the token at the time of writing could mean you prefer less profitable trades.

Source: TradingView

Revival may not be far off

Despite the disappointing price action from ADA, Santiment esteemed Cardano as one of the projects with impressive traction lately.

In addition, the on-chain analytic platform also showed that ADA’s weighted sentiment has improved. Through June 9, the weighted sentiment was -3.057.

Weighted sentiment takes into account the unique commentary on a project on social platforms. When the statistic rises, it means that optimism has returned, as was the case with ADA.

Read from Cardano [ADA] Price prediction 2023-2024

But if it decreases, it means the comments were average pessimistic. Another metric to review was the funding rate on Binance. Financing rates are periodic amounts of an asset paid between long and short traders based on the difference between perpetual contracts.

At the time of writing, ADA’s funding rate was -0.006%. This usually happens when the average margin trend is negative. Therefore, traders who take positions opposite to the prevailing market trend receive compensation from those who align with the trend.

Source: Sentiment