Cardano Price Divergence: What to Expect from Cardano’s Chang Hard Fork

Cardano Price- What It Means for ADA and Its Future

Cardano Price– Cardano’s (ADA) highly anticipated Chang hard fork is set to go live on September 1, marking a significant milestone in the blockchain’s evolution by introducing on-chain governance for the first time since its inception. This upgrade is expected to bring transformative changes to the Cardano ecosystem, but it also has ADA holders treading carefully as the date approaches.

Decline in ADA Trading Activity Ahead of Chang Hard Fork

As the hard fork nears, ADA holders are exercising caution, leading to a noticeable decline in trading activity. An on-chain analysis reveals a significant drop in daily active addresses, with Santiment’s data showing a 31% decrease in the number of addresses participating in ADA transactions since August 27. This decline suggests a reduced demand for ADA, as traders become wary of potential market fluctuations.

Understanding the Price-DAA Divergence: What Does It Signal?

One key metric that highlights the current market sentiment is the price-daily active address (DAA) divergence. As of now, ADA’s price DAA divergence stands at -15.7%, indicating a weakening market. This metric compares price movements with changes in daily active addresses, offering insights into whether the price trends are supported by underlying network activity. The negative divergence suggests that despite any price movement, the network’s activity isn’t keeping pace, which could be a red flag for further price declines.

The Sell the News Fear: Will ADA Traders Cash Out?

A significant concern among traders is the possibility of a sell the news event. This occurs when traders buy an asset in anticipation of a price increase due to an upcoming upgrade, only to sell off once the event occurs, leading to downward pressure on the price. In the case of ADA, this fear is prompting traders to gradually reduce their exposure to avoid potential losses after the Chang hard fork.

ADA Price Prediction: Could the Chang Hard Fork Trigger a Market Shift?

Interestingly, while many ADA holders are reducing their positions, futures traders appear unfazed. Despite the sell the news concerns, they continue to open long positions, as indicated by ADA’s positive funding rate, which currently stands at 0.0084%. A positive funding rate typically signals higher demand for long positions over short ones, often viewed as a bullish indicator.

However, if a wave of sell-offs occurs following the Chang hard fork, ADA’s price could drop toward $0.027, a scenario that many traders fear. On the other hand, if the upgrade sparks a price rally, ADA’s value could rise to $0.39, or even surpass $0.40, marking a significant achievement in Cardano’s roadmap.

FAQs