Cardano (ADA) Price: Large Investors Reduce Holdings as Network Activity Declines

TLDR

• Cardano (ADA) price has declined nearly 2% on Wednesday, extending a three-week downward trend
• Large investors holding 1-100 million ADA reduced their positions by 390 million tokens since July 24
• Network transaction volume dropped to $744 million from $1.69 billion following profit-taking on July 25
• Daily active addresses have recovered to nearly 31,000, showing steady retail participation
• Cardano recently approved a $71 million treasury allocation through its first major on-chain governance vote

Cardano (ADA) continues its downward trend, falling nearly 2% on Wednesday and extending losses for the third straight week. The cryptocurrency is trading within a falling channel pattern as on-chain data shows decreasing network activity and selling pressure from large-wallet investors.

The price decline comes despite a major governance milestone for the Cardano ecosystem. The network recently approved a $71 million treasury allocation through its first major on-chain governance vote, receiving 74% community support.

This historic vote makes Cardano the first top-10 cryptocurrency by market cap to conduct such a governance decision. The funds will be distributed over 12 months with oversight from Intersect, a member-driven governing body.

On-chain data reveals a sharp drop in network activity following a profit-taking surge on July 25. According to Santiment, the Network Realized Profit/Loss recorded a massive spike of 143.63 million ADA on that day, indicating investors booked profits.

Since this profit-booking event, transaction volume has fallen to approximately $744 million on Tuesday, down from $1.69 billion on July 25. As transaction volume encompasses all on-chain activity, this decline signals a slowdown in network usage.

Whale Activity Creates Supply Pressure

Large-wallet Cardano investors have been reducing their holdings since the profit-booking spree. Investors with 1 million to 100 million ADA have decreased their holdings to 18.51 billion ADA, down from 18.9 billion ADA on July 24.

This reduction of 390 million ADA creates selling pressure on Cardano’s price. While investors holding over 100 million ADA have acquired an additional 450 million ADA, increasing their holdings to 5.36 billion ADA, the difference in total holdings between these investor groups indicates greater risk of continued sell-off pressure.

The technical outlook confirms this bearish bias. Cardano has reversed from an overhead resistance trendline of a falling channel pattern on the 4-hour chart. The declining 50-period EMA is approaching the 200-period EMA, increasing the chances of a death cross.

Cardano Price on CoinGecko

The Relative Strength Index (RSI) reads 40 on the 4-hour chart, showing declining buying pressure with room for further downside movement before reaching oversold territory. The Moving Average Convergence Divergence (MACD) line has crossed below its signal line, confirming a bearish trend in momentum.

Treasury Allocation for Development

The $71 million treasury allocation approved by the Cardano community will focus on key development areas including scaling solutions like Hydra. Project Acropolis, a complete node redesign, also received funding approval.

Developer tools and interoperability features with Bitcoin and Ethereum networks are included in the plan. Smart contracts and an independent committee will provide oversight for the treasury spending over the next 12 months.

Despite the price decline, daily active addresses have recovered to nearly 31,000, exceeding the 28,248 addresses that were active during the profit-taking period. This suggests retail participation remains steady despite reduced transaction volumes.

For a bullish reversal, Cardano would need to break above the 200-day EMA at $0.7417, which coincides with the falling channel’s overhead resistance trendline. The current pattern targets the $0.6884 support level, which was last tested on Sunday.

The ecosystem continues developing with the Midnight sidechain launch focusing on privacy features. A major NIGHT token airdrop recently reached over 37 million users across multiple blockchain networks.