Can Cardano (ADA) Bounce Back After Falling Out of Top 10?

Key Takeaways

• Cardano faces criticism for slow development despite strong sentiment.
• Tron’s rapid, market-driven strategy boosts its market position.
• ADA whales are losing interest; smaller holders accumulate amidst market shifts.

Cardano (ADA), a long-term member of the top 10 crypto club, recently lost its spot to Justin Sun’s Tron. 

Despite its recent gains and a notable increase in network activity, ADA’s market value has struggled to catch up with TRX, leading to a pressing question: can Cardano regain its place among the top 10 cryptocurrencies?

Cardano’s Bullish Sentiment 

According to Santiment data , Cardano’s weighted sentiment rose to a high of 4.37, the highest level since December 2023. 

This suggests investors are gaining confidence in Cardano’s long-term potential, with the broader market recovery reflecting this renewed optimism. These developments indicate that the market is transitioning into a phase of increased strength and stability, driven by both technical factors and positive sentiment.

Santiment’s “Weighted Sentiment” metric combines the ratio of positive to negative mentions of a cryptocurrency with the overall volume of social media discussions.

Unlike simple sentiment metrics that only measure mentions’ tone (positive or negative), weighted sentiment adjusts for the volume of discussions.

This means that if there is a lot of chatter about an asset, but it’s mainly negative, the weighted sentiment will reflect that more accurately than just counting mentions alone. 

Still, despite the positive number of mentions, the number of large transactions  has yet to reflect the prevailing optimism. Instead, large transactions on Cardano have hovered around 2,400 since Aug. 5, when it spiked due to the sharp price decline. 

Looking closely at the supply distribution by address , we can see that the biggest cohort between 10,000,000 ADA and 100,000,000 ADA recorded a major downtrend from a high of 419 to a low of 403 transactions. 

The only cohort that showed a continuous interest in accumulating ADA was between 1,000,000 and 10,000,000, growing from a total number of addresses from 2413 on July 17 to a high of 2416. 

From this combined data, we can conclude that ADA whales have been losing interest in holding the token while their hands are shifting to the smaller holders. Will this be enough to keep ADA afloat in the top 10? That would depend on interest in other cryptocurrencies. 

It is worth noting that ADA is still in the top 10 if stablecoins USDT and USDC are excluded. 

ADA Price Analysis 

Cardano’s price dropped to a low of $0.27 on Aug. 5 and recovered by nearly 29% to a high of $0.35 on Aug. 11. Since then, it has made a slight retracement and moved sideways around $0.33. We saw it form a symmetrical triangle until Aug. 19, when it increased again and broke out to the upside. 

It is still slightly lower than its previous high, but a breakout could have signaled the start of its next upward advancement. If the recovery to Aug. 11 and its subsequent consolidation were the first two sub-waves of the new bull phase, it could now be eyeing a breakout above its descending resistance. 

Projecting a target with the Fibonacci extension tool, we create a target of $0.45 for wave 3. Should this play out, a retest of the broken resistance for support could result in a bounce, leading to one more high of around $0.50.