Cardano’s dedicated investors are showing unwavering support for the digital asset, defying the typical trend of profit-taking during market surges. According to data from Alphractal, long-term holders (LTH) of ADA have been steadily accumulating the cryptocurrency since 2021, indicating a strong belief in Cardano’s long-term growth potential.
Despite ADA’s current price being 74.76% below its all-time high of $3.09 in September 2021, LTHs are holding on to their positions, confident in the asset’s future prospects. On the other hand, short-term holders (STH) have been more cautious in their approach, refraining from heavy selling even as ADA has seen a 150% year-on-year gain. Instead, STHs have been modestly increasing their ADA holdings, suggesting a more conservative stance in the current bullish market conditions.
On-chain indicators point to an overheated market for ADA, with the adjusted Sharpe Ratio standing at around 1, indicating strong market performance compared to previous cycles. Historically, ADA has experienced significant price rallies when this ratio approaches 2, potentially signaling further gains for the cryptocurrency.
In addition to market indicators, there is a potential bullish catalyst on the horizon in the form of a US-approved ETF for Cardano. Data from Polymarket suggests an 80% chance of a Cardano ETF being approved in 2025, which could attract new institutional and retail investors, driving up ADA’s value.
Overall, Cardano’s loyal investor base remains confident in the cryptocurrency’s long-term potential, with both LTHs and STHs positioning themselves for potential gains in the future. With market conditions heating up and regulatory developments on the horizon, Cardano could be poised for another significant price run in the near future.