Data Shows Small Holders Will Drive the Next Cardano (ADA) Rally

Throughout 2023, the movement of Cardano (ADA) has been more bullish. Despite the reversal in the past few weeks, the bullish momentum hasn’t ended completely. What is most interesting about this trend, however, is that small investors seem to be the major drivers behind it, not the big whales.

Cardano Small Investors Continue to Deposit

Small Cardano investors have been at the forefront of ADA accumulation throughout 2023. This is seen from January to May where their collective holdings have continued to increase. These investors holding 1,000-10,000 coins and 10,000-100,000 coins have steadily increased their holdings over the past six months.

While whales were biased towards selling than buying, these retail investors were in favor of buying. As a result, their collective holding has grown from around 17% to over 18.1% of the total supply. As a result, these smaller wallets holding between 1,000-100,000 coins now hold 6.29 billion of the total supply of 34.79 billion.

Their accumulation trend also coincides with the increase in ADA price during this time as shown in the chart below. Where there was possibly some profit-booking, their holdings declined. However, the general trend continued upwards, pushing his holdings to new highs.

Small ADA holders increase holdings in six months | Source: Santiment

During this time, the holdings of large investors holding 10,000,000-100,000,000 coins were drastically reduced. This suggests that while small holders were responsible for the price rise, large holders were the culprits behind the price crash as their total holdings increased from 12.1% of total supply to 11.11% in April.

What will trigger the next ADA rally?

Currently, the price of ADA is still down, indicating that investors are very cautious about buying the coin. However, if the accumulation trend among smaller wallets continues, there could be more upside in the times to come. An added benefit of smaller wallets leading the accumulation trend is that it enables a wider distribution of the coin, which helps sustain bull rallies.

ADA is still seeing significant resistance at the $0.38 level, but given that the bears are still weak at this point, the inability to overcome this resistance can be explained by the general lower momentum in the market. When the price of bitcoin rises once again, $0.38 will be quickly surpassed with the next important level sitting 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 is seeing a gain of 1.73% on the weekly chart.

ADA price trending at $0.37 | Source: ADAUSD on TradingView.com