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ADA Leads Market Recovery, This Could Be Behind the Rally
- Cardano’s ADA is significantly outperforming other altcoins with a notable 89% rally in a month, almost doubling its value and igniting speculations about reaching the one-dollar mark.
- Santiment’s analysis suggests that the ADA price surge followed a significant drop in small wallets, indicating a sell-off by small investors due to a lack of confidence.
- Paradoxically this led to a market recovery and a 65% increase in ADA’s value, possibly due to market correction and shifts in investor sentiment.
Cardano Shakes Up Altcoins
While the crypto market is overall in green and rallying after the recent correction, one coin outperforms the rest. Cardano’s ADA is surging at the moment and has not experienced the correction that others have. At the time of writing ADA is up 17% in 24 hours and doesn’t appear to be stopping anytime soon. This comes after an 89% rally for ADA, which has seen the price go from US$0.35 (AU$0.55) a month ago to now US$0.68 (A$1.01), almost doubling in value.
Speculations are now circulating about when ADA will hit one dollar – which, in the Australian context, it already has of course. Pete, a Cardano ambassador and Australian YouTuber with 17k subscribers, was quick to point this out.
So why is ADA pumping? Some have suggested it is due to the release of some new clothing items.
Shake Out of Weak Hands
In all honesty though, while blockchain-inspired fashion is nice, it seems market intelligence platform Santiment has found the reason for the sudden price surge. According to their analysis, ADA experienced a significant decrease in the number of small wallets on November 17th, specifically those holding between 1 to 10 ADA.
This reduction in small wallet addresses is often interpreted as a sign of capitulation, suggesting that many small investors might have decided to sell off their holdings, possibly due to a lack of confidence in future price appreciation. This kind of behaviour can be seen as a turning point in the market. Since this event, the price of ADA has increased by 65%, indicating a substantial recovery or growth in its value following the mass exit of smaller investors.
To clarify, a sell-off caused by a lack of confidence can lead to a price rally due to market correction, removal of weak investors, speculative buying, shifts in market sentiment, and external positive influences. Each of these factors can contribute to turning the market sentiment around, leading to a recovery in price.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
