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- Cardano’s (ADA) social volume remained high, highlighting its enduring popularity within the cryptocurrency community.
- Analysis of ADA’s on-chain metrics, including MVRV and NVT ratios, suggests a potential trend reversal, to the upside.
Over the last week, Bitcoin and most of the altcoins have witnessed a strong pullback with double-digit losses on the weekly chart. Some of the top altcoins like Cardano (ADA) have been also subject to over 10% correction falling under its crucial support level of $0.60, as reported by Crypto News Flash.
However, as per the historical data, there’s a high probability that the Cardano price could initiate a bull rally to its all-time highs very soon. In the past 24 hours, the token experienced a decline of over 3% in price. As of the time of writing, ADA was trading at $0.5666, boasting a market capitalization exceeding $20 billion, securing its position as the 9th largest cryptocurrency.
This decrease in price adversely affected market sentiment, as indicated by our analysis of Santiment’s data, which showed a drop in ADA’s weighted sentiment, signaling prevalent bearish sentiment.
However, despite the price drop, ADA’s social volume remained high, underscoring its continued popularity within the cryptocurrency community.
The Cardano-Bitcoin Correlation
Meanwhile, a prominent ADA analyst known as Cardano Dapp Analyst recently shared a tweet highlighting an intriguing historical pattern. It was noted that the last time BTC achieved an all-time high (ATH), ADA took an additional 90 days to follow suit and reach its own ATH.
Given that BTC recently reached $73k, there’s speculation that ADA might initiate a bull rally soon if history repeats itself. To delve deeper into the likelihood of this scenario, AMBCrypto examined Cardano’s on-chain metrics. It was discovered that ADA’s MVRV ratio was recorded at a negative 23.6% at the time of reporting.
Such low MVRV ratios often precede trend reversals. Additionally, the network-to-value (NVT) ratio for ADA saw a significant decline. A decrease in this metric suggests an undervaluation of the asset, hinting at a potential price uptick in the near future.
Despite the bullish signals provided by the aforementioned metrics, technical indicators painted a bearish picture for ADA. Notably, the MACD showed a distinct bearish dominance in the market.
The Money Flow Index (MFI) experienced a downturn and was poised to move further downward from the neutral point. Additionally, the Relative Strength Index (RSI) mirrored a similar downward trajectory, reinforcing the likelihood of a price decline.
Key Development Activity
In the recent analysis per the Crypto News Flash report, the Cardano blockchain has emerged as developers’ favorite while leaving behind top players like Ethereum, Litecoin, Avalanche, and others.
Cardano (ADA), a prominent blockchain platform, is gearing up for a significant development upgrade aimed at potentially enhancing its developer experience tenfold. This upgrade primarily focuses on enhancing scripts for signing on-chain messages, with the potential to notably boost the network’s efficiency and utility when compared to its primary competitor, Ethereum (ETH).
In contrast to Ethereum’s utilization of a Merkle tree for data broadcasting, Cardano’s UTXO-based design enables quicker execution of scripts for signing messages. This enhancement holds substantial promise for Cardano’s Layer 2 solutions (L2s) and Decentralized Applications (dApps), offering improvements in speed, efficiency, and security, reported Crypto News Flash.
