- The 30-day MVRV was negative, indicating a potential accumulation area for ADA.
- While large transactions decreased, active addresses increased, indicating a possible increase to $0.76.
Cardano [ADA] has lost 40.60% of its value in the past 90 days, prompting speculation that the token may not be able to repeat its performance in 2021.
At the time of writing, ADA was exchanging hands at $0.45. However, a notable development was that Cardano had regained the 9th market capitalization position after Toncoin [TON] occupied it for some time.
However, this development does not validate an exponential rally for the token. Despite the bearish situation, some analysts are predicting a monumental rise for ADA.
ADA is approaching its 2021 breakout point
One of them is Dan Gambardello. According to Gambardello, Cardano has a higher chance of outperforming the 2021 rally. He mentioned this on X (formerly Twitter), noting that the project was more secure, scalable and decentralized.
He wrote,
“Last cycle at this point, Cardano was down 90% from its all-time high. Many said it was a dead ghost chain. Out of nowhere, the price rose by 3,000% from 0.10 to $3.00. Right now, in the same part of this cycle, it is down 85%. This time safer, decentralized and scalable.”
ADA’s all-time high was $3.10 in September 2021. When the token reached its price, its market value to realized value ratio (MVRV) was 35.94%.
The MVRV ratio can be used to identify the tops and bottoms of the market by assessing the profitability of the holders. If the benchmark is extremely high, it means the cryptocurrency is close to the top.
In this case it could be called undervalued. On the other hand, a low value suggests that many holders are making a loss and the token may be undervalued.
Is it time to buy?
At the time of writing, Cardano’s 30-day MVRV ratio was -1.402%. This suggests that the token may be undervalued. However, this does not mean that the ADA could return to $3 at the peak of this cycle.
Source: Santiment
But if buying pressure increases, the token’s price could reach $0.76. The last time the token reached such levels was in March, when altcoins enjoyed a brief rally.
Furthermore, Cardano’s trading volume may also need to reach impressive levels before the token can soar high. The rising volume indicated increasing interest in a token. If this is accompanied by a price increase, it could strengthen the upward trend.
Another metric that could influence ADA’s price is its large trades. This amount is not accessible to the average retail participant in the chain.
Therefore, it acts as a benchmark for institutional and whale activity with a token. According to IntoTheBlock, the number of ADA involved in major transactions had fallen to 25.52 billion ($11.48 billion).
A further decline in this amount could reduce the price of ADA. If this is the case, the price of the token could drop to $0.42.
Source: IntoTheBlock
However, a revival in value could mean good news for the native Cardano token. For example, if institutional players can accumulate more than 200 billion ADA, without significant distribution, the price could rise.
Network activity is increasing
If this were the case, the price of ADA could reach $0.76 as mentioned earlier. In a very bullish situation, the value of the token could reach the $1 milestone.
In terms of active addresses, AMBCrypto found that the statistic increased. Based on data from Santiment, the number of addresses active 24 hours a day was a maximum of 28,000.
This increase implied an increase in the number of unique wallets participating in successful transactions. But this metric doesn’t always affect the price, especially if the increase is mild.
Source: Santiment
However, if activity on the network becomes very intense, ADA can take advantage. It appears that the price of ADA could be much higher before the end of the bull market.
Is your portfolio green? View the Cardano Profit Calculator
But expecting the token to reach $3 might be too much to ask. At the same time, some participants expect an altcoin season to emerge before this cycle reaches its peak.
If that happens, ADA could try to hit the $3 mark.