Cardano’s (ADA) much-anticipated Chang hard fork is set to go live on September 1st, but the journey to this pivotal upgrade has not been smooth. Originally planned for an earlier date, the upgrade was delayed after Cardano’s founder, Charles Hoskinson, announced that some tier-1 centralized exchanges, including Binance, were not fully prepared for the transition. While the delay has allowed for necessary adjustments, it has also introduced a wave of caution among ADA holders, dampening market enthusiasm.
The First On-Chain Governance for Cardano
The Chang hard fork is more than just another update; it marks a significant milestone for Cardano by introducing on-chain governance for the first time. This new feature is expected to empower ADA holders with greater control over the platform’s future developments, potentially enhancing its appeal in the long term. However, the lead-up to this upgrade has been met with mixed reactions, as many within the ADA community have chosen to tread carefully, resulting in a noticeable decline in trading activity.
Is a “Sell the News” Event on the Horizon?
On-chain data reveals a troubling trend as the upgrade date approaches. According to Santiment, there has been a 30% drop in the daily count of addresses participating in ADA transactions, indicating a waning demand for the altcoin. The negative price-daily active address (DAA) divergence further supports this cautious sentiment. With a -15.7% DAA divergence, the market is signaling a potential weakening, raising concerns of a “sell the news” event where traders might offload their ADA holdings after the upgrade, causing a price decline.
The prospect of a sell-off has led to a significant decrease in trading activity as ADA holders look to minimize their risk. Yet, in the futures market, a different story unfolds. The current funding rate of 0.0084% suggests that there is still interest in long positions, with some traders betting on a price rise following the upgrade.
What’s Next for ADA?
The aftermath of the Chang hard fork could see ADA’s price move in one of two directions. If the upgrade triggers widespread sell-offs, ADA could drop to as low as $0.027, exacerbating the recent market fears. Conversely, if the upgrade injects a dose of optimism into the market, ADA might see a significant price surge, potentially breaking the $0.39 mark and aligning with Cardano’s long-term growth ambitions.
Also Read: Cardano Price Forecast – Can ADA Soar 21,000% If Bitcoin Hits $500K? Analysts Weigh In
Current market sentiment leans toward caution. The Fear & Greed Index, a key indicator of investor sentiment, has slipped from “Greed” into “Fear” territory, shedding 27 points in just a week. This shift suggests that investors are more inclined to sell their holdings than to buy, reflecting a broader anxiety about the immediate future of ADA.
As the clock ticks down to the Chang hard fork, all eyes are on Cardano. Whether the upgrade will propel ADA to new heights or trigger a market sell-off remains to be seen, but one thing is certain: the next few days will be crucial for the future of Cardano.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
