Cardano
How Cardano’s traders are seizing their chance after 20% price drop
Here’s a detailed analysis explaining how ADA’s price may get some sort of respite in the short term.
- Buy orders for ADA outnumbered the waiting sell-offs, indicating that the price can hike
- Cardano’s native token could climb to $0.40 based on the historical MVRV ratio data
Cardano’s [ADA] price has fallen by 20.99% in the last 30 days. However, AMBCrypto found that traders are trying to take advantage of the discount.
We got this data after examining the Exchange – Onchain Market Depth metric. This metric displays the orders of market participants on exchanges. It is divided into two – The bid side and the ask side.
Put simply, Bid on the Exchange – Onchain Market Depth tracks the number of tokens ready to be bought. On the right is Ask, which denotes the number of tokens ready to be sold.
Is it time to offload ADA or not?
At press time, buyers looked prepared to buy a total of 166. 73 million ADA. The average price of the bid was $0.37. At the same price, bears were ready to offload 121.95 million Cardano native tokens.
Considering that ADA changed hands at the same price, the orders could affect the token’s value. However, since the buy orders outweighed the sell-offs, ADA might hold up at $0.37.
However, there is a chance of a price hike. If that happens, Cardano’s price might move up to $0.40 in a few days.
Source: IntoTheBlock
Apart from the activity on exchanges, it is important to consider other on-chain metrics too. To do this, AMBCrypto analyzed the Market Value to Realized Value (MVRV) ratio.
However, the MVRV ratio shows the profitability of holders. It also helps identify if a cryptocurrency is undervalued or overvalued, when compared to the fair value.
Cardano presents an opportunity
At the time of writing, Cardano’s 30-day MVRV ratio was 13.33%. This meant that if every ADA holder sells the token, the average return would be a 13.33% decrease from the average purchase price.
Historically, ADA bounces when the MVRV ratio is between -11 and -27%. Therefore, there is a chance
that the price of the token might appreciate in the days or week to come.
Source: Santiment
Now, the potential price hike does not mean that ADA might not go lower. But if it does, the downswing might not be as severe as it has been in the last 30 days.
In addition, the one-day circulation dropped from the hike on 18 June. In fact, Circulation showed the number of tokens engaged in transactions within a given period.
If circulation increases, it means transaction activity around a cryptocurrency has risen. However, for Cardano, the metric dropped to 196.73 million.
The fall in the number of tokens engaged in transactions could be good news for the price. This, because selling pressure could be minimal.
Source: Santiment
Should circulation continue to fall, then ADA could have a higher chance at appreciating. As mentioned above, Cardano’s price could rise to $0.40.
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However, this prediction might be invalidated if the broader market continues to see a downside. If this happens, ADA might fall to $0.35 on the charts.
