As a seasoned analyst with over a decade of experience in the volatile world of cryptocurrencies, I find myself intrigued by the latest developments surrounding Cardano (ADA). The fact that long-term holders’ holdings have hit an all-time high despite ADA’s underperformance this year is a testament to their confidence in the token’s potential.
An important on-chain metric for Cardano (ADA) recently hit an all-time high (ATH), highlighting the confidence in the crypto token despite its underperformance. This and several other bullish metrics suggest that a significant rally may be on the horizon for Cardano.Â
Long-Term ADA Holders’ Holdings Hit All-Time High
According to a recent post from IntoTheBlock (previously known as X), it was disclosed that a record high (ATH) percentage of Cardano’s ADA tokens are being held by long-term investors, with approximately 40% of the total supply in their possession. These long-term holders are defined as individuals who have owned ADA for more than one year.
According to IntoTheBlock’s analysis, this development signifies a strong belief from these holders, given that Cardano has had a challenging run in this market cycle. Currently, ADA ranks as the poorest performer among the top ten cryptocurrencies by market capitalization, having lost more than 43% since the start of the year.
In contrast to this situation, long-term investors of Cardano have opted to expand their ownership rather than selling, demonstrating their faith in the token’s future value. It’s important to note that a large portion of these investors might be holding tokens at a loss, as data from IntoTheBlock indicates that only 18% (approximately 784,110) of Cardano wallets are profitable, while there are about 3.2 million addresses categorized as long-term holders.
Simultaneously, IntoTheBock emphasized that faith in ADA has expanded to its network actions as well. The number of transactions within the network and the active user base have stayed consistent since April, refuting claims made by skeptics who deemed the Cardano network a ‘phantom chain.’ This underscores the dedication of the Cardano community to their ecosystem.
According to IntoTheBlock’s analysis, Cardano consistently processes about $7.2 billion worth of transactions daily, positioning it among the leaders in this aspect compared to other networks. This high transaction volume relative to its Network Value / Daily Transaction Volume (NVT) ratio of approximately 2.62 suggests that the current price of ADA may be undervalued.
Cardano Adoption Has Stagnated
Despite the bullish on-chain activity indicators for Cardano, there’s still apprehension about its widespread adoption. Compared to the significant expansion it experienced during the previous cycle, IntoTheBlock points out that ADA has struggled to draw in new users during this current cycle. The number of Cardano addresses holding a balance has been relatively steady at approximately 4.45 million for more than a year.
To date, there’s been a significant focus on networks such as Solana and Ethereum‘s layer-2 network, Base. However, the growth of user base in the Cardano ecosystem is vital for any potential price increase that the ADA crypto token might experience. This increased user base will bring more capital into ADA, sparking rallies and driving the token towards price discovery.
Currently, as I speak, Cardano’s value is approximately $0.33, having decreased by more than 1% in the past 24 hours, based on information from CoinMarketCap.
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2024-08-16 00:47