Cardano (ADA) Hits Highest Profitability Levels In 2023, Is It Time To Sell?

The profitability of Cardano (ADA) holders has risen to one of their highest levels in 2023. This metric which measures the price at which the coins were last moved compared to the current spot price of the asset has seen the most amount of ADA holders in profit.

Cardano Holders In Profit Rises To 37.59%

Following the altcoin rally that dominated the majority of the last week, the percentage of Cardano holders seeing a profit has reached its highest level this year. Data from IntoTheBlock shows that this metric put 37.59% of all holders in profit as of November 11, which is the highest that it has been so far this year.

To put this rise in profitability in perspective, at its lowest level this year, only 3.91% of all ADA holders were seeing a profit as of October 19. This was the culmination of a year filled with losses for Cardano holders while the price suffered multiple dips.

Although the vast majority of ADA investors are still in losses, the reversal in profitability levels could signal a change in the bearish trend that has dominated most of 2023. Currently, there are 1.51 million holders in profit (33.92%) as of November 13, with 2.61 million holders holding underwater bags. These holders in losses account for 58.52%, while 218,700 holders (4.9%) are sitting in neutral. This means that these 218,700 bought their coins at prices similar to the current market price.

The increase in holders in profit has also moved up the year-to-date average of holders seeing a profit. There are now 716,540 addresses in the green on a YTD average accounting for 16.29% of the total holder base. In contrast, 3.51 million addresses accounting for 79.64% are in losses, and 179,510 addresses accounting for 4.08% are sitting ‘At The Money’.

Is It Time To Sell ADA?

A rise in the profitability of Cardano holders could be a sell signal. This is because when holders who have been in losses for a long stretch of time move back into the profit territory, they are likely to sell some or all of their holdings in order to realize profit.

This profit-taking can have a significant impact on the ADA price depending on the size of the holders who are selling and how much volume they are offloading into the market. This supply being reintroduced into circulation could overwhelm demand and trigger a decline.

Profit-taking could explain the decline that ADA has seen over the last few days when the price fell from $0.39 to $0.36. However, the losses over the last day have been meager at 1.48% which could suggest that investors aren’t selling off too much of their tokens.