Cardano ($ADA) is gearing up for a significant upgrade known as the Chang hard fork, expected to take place by the end of July.
This upgrade has generated substantial interest within the cryptocurrency community, especially due to the notable price rally that followed Cardano’s previous hard fork in 2021.
The Chang hard fork marks the final stage of Cardano’s roadmap, transitioning into the Voltaire era, aimed at creating a fully decentralised blockchain ecosystem.
Post-upgrade, Cardano will no longer be managed by Input Output Global (IOG) but will be governed by community members.
Recently, the Cardano Foundation, in collaboration with Cardanoscan, launched a tracking page to monitor the readiness for this significant upgrade.
The importance of the Chang hard fork lies in its role in establishing Cardano’s community-run governance model, introducing minimum-viable community-run governance as a critical feature.
Historical surge hints at ADA rally
As Cardano prepares for the hard fork, there is speculation about a potential rally in $ADA’s price, driven by historical performance.
Data from IntoTheBlock indicates that $ADA experienced a 130% price surge during the run-up to its last major upgrade in 2021. It helped the coin to rise from $1.35 to $3.10 within a month.
This historical precedent has led to expectations that the upcoming hard fork could similarly trigger a significant price rally for $ADA.
The cryptocurrency community is keenly observing how the Chang hard fork might impact $ADA’s price.
However, at the time of press, $ADA is down 12.9% in the last 24 hours, trading at $0.33. This can be connected to the broader crypto market’s downtrend, witnessing over a 5.8% negative change over the last day.
Nevertheless, the market is closely watching July’s progression, eager to see if the Chang hard fork will catalyse a similar rally, or if the historical trend will not repeat itself.
Opposing opinions from key investor cohort
A key group of investors, known as whales, have shown bearish signs, which could impact $ADA’s price.
The transaction volume for amounts exceeding $100,000 has seen a significant drop, from $17.2 billion to $8.4 billion in a quarter.
Whales, who hold considerable influence over ADA’s price, are pulling away from the network. This means that they are shifting the recovery responsibility to retail investors who are more likely to hold rather than sell.
Observing the active addresses by profitability, less than 8.3% of all participating investors are in profit, which is a positive indicator as it reduces selling pressure.
If the proportion of profitable addresses exceeds 25%, intense selling pressure usually follows.
Therefore, $ADA appears to have the support of its investors, which is crucial for its stability.
However, the diminishing participation of whales could mean that the price rally might not be as strong as expected.
Breaching a resistance
Cardano’s price is still struggling below $0.34, facing much resistance at the $0.36 price level.
Post this is another critical resistance level at $0.37, which has historically been tested as support multiple times. Successfully breaching this level would further Cardano’s recovery efforts.
However, the lack of bullish activity from whales could prevent $ADA from rising above $0.40.
Conversely, failing to breach the resistance could result in a drop below $0.34, potentially pushing $ADA down to $0.32 or lower, which would invalidate the bullish outlook.
The market is watching closely as these levels are tested, understanding that the Chang hard fork’s success and the response from both retail and whale investors will significantly influence $ADA’s short-term and long-term price trajectory.
As Cardano continues its journey towards a decentralised governance model, the community’s support will be pivotal in navigating these fluctuations.
