Cardano is at a critical point where whales are piqued interest

Cardano (ADA) is currently in a critical position in the midst of a mix of bullish and bearish indicators that could act as support in its journey to recover the 82% loss of last year or cause the asset to dump the 45% it has seen since the start of the year.

Increased whale activity drives ADA demand

Santiment, a behavioral analytics system, highlighted these metrics as it sought to address the current state of Cardano in a recent article. One of the most important of these bullish indicators is the significant rise in whale activity that contributed to the increased interest in ADA.

The ADA has seen a significant rise in the volume of transactions for whales since the beginning of February. On a daily basis, there are approximately 1,700 transactions of $100,000 or more, which indicates a significant increase from the January average of about 300 transactions. This sudden spike in trading activity indicates a massive uptick.

Saniment highlighted this rise in whale transactions last week, revealing that the last time the ADA saw such a high level of whale activity was in May 2022. This surge in whale activity comes at a time when the asset is trying to recoup the values ​​it lost last year and is in turn lead to increased demand.

According to a report by whale-tracking resource WhaleStats, Cardano recently emerged as the most traded token among the 100 largest whales on the Binance Smart Chain (BSC). This is evidence of the increased interest in whales.

Moreover, the collapse of FTX last November triggered a trend of massive ADA accumulation by large investors (whale shark titles) who own 10,000 to 10 million ADA. The titles have collected a total of 659.53 million ADA (worth about $235.5 million) since November 9th. This is a positive sign as it indicates massive demand.

Another bullish indicator is the current discount rate for ADA which should represent an attractive buying area for investors. Investors usually prefer to buy assets when prices have dropped significantly, and this pattern is often referred to as “blood in the streets.” Given Cardano’s two-week price correction and the 82% drop last year, buying ADA at its current price is less risky compared to typical times in Cardano’s history.

Circulation is struggling amid a drop in active titles

On the contrary, ADA is currently seeing some bearish metrics that may alienate investors’ interest. One such metric is the problem of token trading, as evidenced by Santiment’s Average Invested Life in Dollars Index. Coins invested in the Cardano network remain inactive for a longer period. Six months ago, the average lifespan of coins in the address was 267 days. However, this number has recently increased to 407 days.

In addition, unique daily addresses on the Cardano network have begun to decline. After rising to 85,000 addresses last November, the daily unique addresses are down, averaging 62,000 as of press time. Data from Messari shows that active addresses over the past 24 hours currently sit at 49,284.

Meanwhile, ADA is currently trading at $0.3614, up 3.21% in the past 24 hours, making it the biggest gainer among the top 10 most valued assets. The asset is trying to reclaim Sunday’s highs at $0.372 after falling sharply from the price area.