A worrying trend is being observed for Cardano‘s ADA altcoin project. According to on-chain data, there is a significant decrease in the number of small-scale wallet addresses holding ADA.
Since mid-November, there has been a notable drop in small-scale wallet addresses that hold ADA. The number of such wallet addresses holding between 1-10 ADA has decreased by 98.1% since that time. Historically, this is considered a sign that investors are giving up and surrendering, which could be a harbinger of a potential trend change for the price.
Despite this development, ADA’s price has shown an increase of over 65% since November. The price chart clearly demonstrates the altcoin’s strong performance and that it has been one of the best-performing altcoins in the recent crypto market rally. However, the sharp drop in the number of small-scale wallet addresses could pose a problem for the developing rally.
The decrease in small-scale wallet addresses is often seen as a serious warning sign and indicates that small investors are beginning to lose faith in that asset. The mass exits of these investors are generally interpreted as a harbinger of serious selling pressure and a significant decrease in buying power.
In recent days, ADA’s price chart has predominantly shown an upward trend under high volatility. Still, the sales of ADA by small investors could disrupt this positive atmosphere. According to market observers, if the exit of small investors continues, the fuel for ADA’s current rally may eventually run out, and the ascending trend could give way to a downtrend.