- The 30-day MVRV was negative, indicating a possible accumulation area for ADA.
- While large transactions fell, active addresses rose, suggesting a possible rise to $0.76.
Cardano [ADA] it has lost 40.60% of its value over the past 90 days, prompting speculation that the token may not be able to repeat its performance in 2021.
At press time, ADA had changed hands for $0.45. However, one notable development was that Cardano regained the 9th market place after Toncoin [TON] it took some time.
However, this development does not verify an exponential rally for the token. Despite the bearish situation, some analysts are predicting a monumental increase for the ADA.
The ADA is approaching a tipping point in 2021
One of them is Dan Gambardello. According to Gambardello, Cardano has a better chance to overcome its 2021 rally. He mentioned this on X (formerly Twitter), saying that the project was more secure, scalable and decentralized.
wrote,
“In the past cycle at this point, Cardano is down 90% from its all-time high. Many said it was a chain of dead spirits. Out of nowhere it pumped 3000% from 0.10 to $3.00. Right now in the same part of this cycle, it’s down 85%. This time, more secure, decentralized and scalable.”
ADA’s all-time high was $3.10 in September 2021. When the token hit the price, the market value to realized value (MVRV) ratio was 35.94%.
The MVRV ratio can be used to identify market tops and bottoms by assessing the profitability of holders. If the metric is extremely high, it means that the cryptocurrency is near its peak.
In this case, it could be labeled as an understatement. On the other hand, a low value indicates that many holders are in loss and the token could be undervalued.
Is it time to shop?
At the time of writing, Cardano’s 30-day MVRV was -1.402%. This suggests that the token could be undervalued. However, this does not mean that ADA could return to $3 at the top of this cycle.
Source: Santiment
However, if the buying pressure increases, the price of the token may reach $0.76. The last time the token reached such a level was in March, when altcoins experienced a brief rally.
Additionally, Cardana trading volume may also need to reach impressive levels for the token to go high. The growing volume indicated growing interest in the token. If accompanied by an increase in price, it could strengthen the uptrend.
Another metric that could affect the price of ADA is large transactions. This amount is not available to average retail participants on the chain.
Therefore, it acts as a measure of institutional and whale activity with the token. According to IntoTheBlock, the number of ADAs involved in large transactions dropped to 25.52 billion ($11.48 billion).
A further decrease in this amount could drive the price of ADA down. In that case, the price of the token could drop as low as $0.42.
Source: IntoTheBlock
However, the value recovery could mean good news for Cardano’s native token. For example, if institutional players can accumulate more than 200 billion ADA, without significant distribution, the price can shoot up.
Network activity is increasing
If this were the case, the price of ADA could reach $0.76 as mentioned earlier. In a highly bullish situation, the value of the token could reach the $1 milestone.
In terms of active addresses, AMBCrypto found that the metric has increased. Using data from Santiment, up to 28,000 addresses were active in 24 hours.
This increase marked a sharp increase in the number of unique wallets participating in successful transactions. But this metric doesn’t affect price all the time—especially when the increase is modest.
Source: Santiment
However, if the activity on the network is very intense, ADA could benefit from this. By the looks of it, ADA’s price could be much higher before the end of the bull market.
Is your portfolio green? Check out the Cardano profit calculator
But expecting the token to reach $3 might be asking too much. At the same time, some participants expect an altcoin season to emerge before this cycle peaks.
If that happens, the ADA could try to reach the $3 mark.