While Cardano’s ADA token continues to face significant selling pressure, a notable institutional player is sending a contrarian signal. Grayscale Investments, a major digital asset manager, has executed a substantial portfolio rebalance, significantly increasing its allocation to ADA despite the cryptocurrency’s persistent price weakness. This strategic accumulation raises the question of whether sophisticated investors are positioning against the prevailing negative sentiment.
A Strategic Accumulation Against the Trend
In a recent and decisive portfolio adjustment, Grayscale raised Cardano’s weighting within its Smart Contract Fund to 20.34%. This move elevates ADA to the fund’s third-largest holding. The accumulation is particularly striking given the current market context: ADA has shed over 22% of its value in the past four weeks and is struggling to maintain support above the $0.27 level.
Examining the Market’s Foundation
Current on-chain metrics and market data paint a picture of cautious capitulation. A decline in futures open interest points to capital outflows and reduced speculative activity. Furthermore, the fall in the Market Value to Realized Value (MVRV) ratio indicates that a large portion of holders are currently sitting on unrealized losses. Historically, such phases of investor distress have often preceded periods of price consolidation and potential bottom formation, as weaker hands exit their positions.
Should investors sell immediately? Or is it worth buying Cardano?
Development Momentum Continues Unabated
Separate from the price action, Cardano’s development team remains focused on long-term infrastructure upgrades. On February 21, Cardano Node v10.6.2 was released, focusing on stability enhancements and laying the groundwork for the upcoming “van Rossem” hard fork. Concurrently, the Plutus smart contract platform was updated to version 1.58.0.0, optimizing performance in preparation for the Protocol 11 upgrade.
Upcoming Catalysts for Network Growth
Attention is now turning to specific, scheduled developments that could enhance network utility and liquidity. The integration of the stablecoin USDCx is anticipated before the end of February, a move designed to bolster Cardano’s decentralized finance (DeFi) ecosystem. Looking further ahead, the launch of the privacy-focused Midnight sidechain is slated for the end of March 2026. The successful delivery of these fundamental expansions will be critical for generating a sustained shift in market sentiment.
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