The number of active wallets on the Cardano network has decreased by 29,976 in the past 13 days amid retail profit-taking as larger holders accumulate assets.

Recent data from market intelligence platform Santiment reveals a decline in active wallets across several top-cap cryptocurrencies. This trend is often linked to fear, uncertainty, doubt (FUD), or capitulation among less experienced traders.

According to Santiment, these conditions may paradoxically act as bullish indicators as long-term holders tend to accumulate assets during such periods.

Cardano Wallet Decline After Major Price Pump

For Cardano, the network has seen a decrease of 34,931 wallets over the past month, representing a 0.78% drop. Notably, in just the last 13 days, 29,976 wallets became inactive.

Santiment attributes this pattern to short-term profit-taking among retail investors as it coincides with major price gains. Notably, ADA has surged by over 108% in the last two weeks, reclaiming its yearly highs. However, the rally is cooling as ADA stalls around $0.7326.

Santiment noted that historically, retail traders tend to lock in profits when bullish momentum builds, which explains the decline in ADA wallets. Meanwhile, Santiment data suggests that the decline in wallets aligns with long-term accumulation by larger holders.

Essentially, the downward trend in wallet activity is a positive sign for ADA’s long-term price prospects. As retail investors dump their holdings on small gains, whales, with a long-term perspective, buy back the tokens.

Bitcoin and Dogecoin Follow Patterns

Bitcoin (BTC) has also experienced a reduction of 15,120 wallets in just the past four days. Similarly, Dogecoin (DOGE) saw a steep decline of 24,456 wallets within a single day. 

Both assets exhibit patterns consistent with retail traders exiting positions after significant gains. Santiment notes that such reductions in wallet activity can often be a bullish sign, suggesting long-term price stability.

History Supports Bullish Predictions

In addition to wallet activity, historical analysis of Cardano offers insights into potential price trajectories.

Analyst Ali Martinez recently projected that ADA could surge by over 713%, reaching $6 by late 2025. Martinez’s prediction is based on similarities between the current market cycle and Cardano’s rapid growth during the 2020-2021 bull run.

Other analysts, including Ben Armstrong, have also weighed in on ADA’s future, estimating a price peak of $5 if market conditions remain favorable.