Though Cardano (ADA) has been gaining traction for a while, the recent accumulated momentum has garnered active buys as data shows the rising accumulation of ADA. ADA’s movement to the upside since last December totaled 30%, as new whales have been reported to be holding at least 1 million ADA tokens in these past few weeks amid the mini bull run.

Regardless of the bear market, Cardano has proved to be a token worth holding both with its utilities and the recent positive news that includes the rapidly growing DeFi and NFT ecosystem of the Cardano Blockchain. 

Cardano Rally Since December 

Late last year, ADA gained traction and purchases from whales. According to crypto analytics platform Santiment, ADA has jumped an impressive 30% in its value since December 30th. 

Cardano (ADA) up by 30% since December as whales accumulate | Source: Santiment

Twenty-eight new whale addresses holding at least 1 million ADA have appeared on the Cardano blockchain since the price surge began, indicating an aggressive asset accumulation from large investors. 

In addition, Santiment mentioned that alongside the token’s upward rally, ADA trading volume and amount of large whale transactions hit 2-month high crushing levels last seen in November. 

Notably, ADA has been down by nearly 90% from its all-time high of $3.09. This recent accumulation resulting in a rally in its price could be what the token needs to recover. In the last 7 days alone, ADA has been up by 25%.

Alongside the whole crypto market, ADA has taken advantage of the mini bull run and followed suit in the right direction. Among the largest crypto by market cap, ADA is still the only one making significantly higher highs, following Solana (SOL), which had already gained 43% in the past 7 days. 

Cardano’s Anticipated Catalyst 

While there is still no apparent reason behind the recent active accumulation of ADA, it’s worth noting that the blockchain itself has got big announcements it’s working on, which could be an enticing catalyst enough to attract large investors to buy up the digital asset.

On the main stage at the CardanoSummit2022, the CEO of COTI, Shahaf Bar-Geffen, announced that Cardano is set to Launch an over-collateralized stablecoin which will go live on Mainnet later this month. 

Historically, the launch of stablecoins always ends up being a good enough catalyst or an appealing use case that often results in a significant surge in inflows as it causes on-ramps and off-ramps of funds that keep users within the ecosystem.

Following its spike in accumulation, Cardano decentralized applications have also been seeing a spike in the number of unique accounts. DApps like Genius Yield have so far gained 2,810% growth in unique accounts in the last 5 days. All of these indicate a steady increase in Cardano adoption and decentralized finance activity.

ADA price is moving sideways on the 4-hour chart. Source: ADA/USDT on TradingView.com

Meanwhile, at the time of writing, ADA is continuing in an uptrend, up by almost 1% in the past 24 hours with a trading price of 0.3180 and a 24-hour trading volume exceeding $500 million.

Even though Bitcoin (BTC) and the broader crypto market are experiencing an upswing in the first days of the new year, on-chain data shows that the market remains in a deep slumber. As Glassnode explains in its latest report, the BTC price has shown historically low volatility over the past weeks.

And according to the on-chain data for Bitcoin, there is currently little reason to believe that the boredom in the market will change quickly. However, if a move does occur, it will likely be an explosive market move, as in previous cycles when volatility was extremely low.

To support this thesis, Glassnode cites Bitcoin’s realized volatility over the last month, which is at a multi-year low of 24.6%. As the chart below shows, there have been a few times in Bitcoin’s history when it has been this low. In most cases, BTC saw a rally after the market awakened; only in one case, in November 2018, did the price fall dramatically (-50%) lower.

Bitcoin 1-month realized volatility, Source: Glassnode

Bitcoin Network Usage Is Low

Also, the weak baseline for Bitcoin is identified by Glassnode in continued restrained network usage. While on-chain activity increased after the FTX collapse, the uptick briefly leveled off later. The monthly average of new Bitcoin addresses is approaching the annual average again.

The overall transaction value of the network is in free fall. While the daily transfer volume was still around $40 billion in the third quarter of 2022, it is currently only $5.8 billion/day. The value is thus back at the level before the bull year 2020.

According to Glassnode, this indicates a displacement of institutional capital. This is reflected in the fact that the share of transfers of more than $10 million has fallen from 42.8% before the collapse of FTX to only 19.0%. Glassnode states:

This suggests a significant lull in institutional sized capital flows, and perhaps a serious shaking of confidence occurring among this cohort. It may also reflect, in part, and sadly, an expulsion of the questionable capital flows associated with the FTX/Alameda entities.

One indicator of a breakout from boredom could be the inflows and outflows on exchanges. But again, Glassnode notes that the on-chain data does not yet signal any momentum for an explosive move. Bitcoin inflows are currently between $350 million and $400 million per day, a far cry from the billions seen in 2021-22, according to Glassnode.

Major Indicator Remains Bearish

According to the research firm, the Realized Cap is one of the most important metrics in on-chain analysis. Unfortunately, the metric currently gives BTC investors just as little hope for a change anytime soon. The Bitcoin Realized Cap has declined 18.8% since the all-time high, representing a net capital outflow of -$88.4 billion from the network.

“This makes for the second largest relative decline in history, and the largest in terms of USD realized losses,” Glassnode notes, pointing at the following chart. Only in 2011/2012, the bear market drawdown was worse by 24%.

Bitcoin Realized Cap, Source: Glassnode

Concluding the report, Glassnode says:

[I]t is rare for such conditions to stick around for long. Past occasions where BTC and ETH volatility was this low have preceded extremely volatile market environments, with past examples trading both higher and lower.

At press time, the BTC was slowly grinding higher in the 1-day chart. The price stood at $17,268.

Bitcoin grinding higher, 1-day chart | Source: BTCUSD on TradingView.com

Featured image from Jievani Weerasinghe / Unsplash, Chart from TradingView.com