As a seasoned crypto investor who has weathered countless market cycles and witnessed the rise and fall of numerous digital assets, I find myself intrigued by the recent analysis on Cardano (ADA) by IntoTheBlock. The impressive on-chain volume and low NVT ratio are certainly eye-catching, suggesting potential undervaluation in ADA’s current market price.
Recently, while delving into the intricacies of various blockchains as a researcher, I’ve come across some fascinating insights from IntoTheBlock’s analysis on X. Notably, the Cardano network stood out due to its substantial on-chain transaction volume.
As a researcher delving into the world of blockchain, I’ve discovered an intriguing fact: Cardano processes around $7.2 billion in daily on-chain volume. This figure outstrips many other blockchain networks, underscoring the practical value and robustness of the Cardano network.
Despite a high on-chain transaction volume, the Network Value to Transactions (NVT) ratio comes in at a relatively low 2.62, potentially suggesting that Cardano (ADA) may be underpriced.
For more than a year now, approximately 4.45 million Cardano addresses have maintained a balance. Here’s an explanation of the situation:
— IntoTheBlock (@intotheblock) August 13, 2024
The Network Value to Transactions (NVT) ratio compares a cryptocurrency’s market capitalization to its transaction volume, helping assess whether it’s overpriced or underpriced. This assessment is based on the idea that a coin’s value should reflect its overall network activity, implying higher usage translates to a higher price.
A nearly negligible NVT (Net Value to Total) ratio could hint that the value of ADA is significantly underestimated, potentially implying that it’s being traded for less than its actual market worth.
Currently, when this text is being penned down, the primary digital currency of Cardano, ADA, stands at a price of $0.334. This value is significantly lower compared to the current market capitalization of Ethereum ($2,637) and Solana ($145).
Currently, the value of ADA stands at approximately 89.2% less than its peak price of $3.10, a level achieved three years ago (in September 2018). Despite this year’s market surge that pushed BTC to around $74,000 in mid-March, ADA was unable to reach a new all-time high.
On the contrary, the proportion of ADA owned by long-term investors has peaked at its maximum, comprising roughly 40% of the entire stockpile. This persistent holding pattern suggests a high degree of conviction among ADA owners.
Cardano seeing stable transaction count despite decrease in new users
On the other hand, for more than a year now, the number of Cardano accounts holding a balance has remained relatively stable at approximately 4.45 million.
During the previous period, Cardano experienced significant expansion, becoming a credible contender alongside Ethereum. Yet, in the current phase, the network encounters challenges attracting fresh users. Instead, attention is primarily directed towards emerging platforms like Solana and Base.
Based on data from IntoTheBlock, although there’s been a decrease in new users, the number of transactions and active participants within the network has remained stable since April. This suggests a dedicated community that continues to actively engage with the underlying protocol.
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2024-08-13 13:43