HomeNewsCardano's Price Dilemma: Can On-Chain Metrics Propel ADA to New Heights?

Cardano’s Price Dilemma: Can On-Chain Metrics Propel ADA to New Heights?

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  • Cardano’s (ADA) price struggles below $0.25, despite a $6 billion increase in the global crypto market this week.
  • Historical data shows a close correlation between ADA’s price and Daily Active Addresses on the Cardano network, suggesting a potential for price breakout.

Cardano (ADA), currently lingering below the $0.25 mark, presents an intriguing case in the context of the recent $6 billion surge in the global cryptocurrency markets. The focus here is on understanding the potential catalysts for a price breakout for ADA, drawing insights from historical data and on-chain metrics.

A Look at Cardano’s Whale Movements

Despite the acquisition of 120 million ADA by Cardano whales in October, their current holdings fall significantly short of the balances recorded at the price peak in April 2023. This presents a deficit that needs to be addressed to potentially double Cardano’s price. The historical peak for ADA in 2023 was marked at $0.46 on April 15, fueled by positive market reactions to Ethereum’s Shanghai network upgrade.

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Post this peak, Cardano whales engaged in a selling spree, offloading 1.98 billion ADA coins between April 19 and May 20, leading to a 24% price decline. Fast forward to October, and we observe these whales accumulating 120 million ADA, elevating their balances to the highest since the April sell-off. However, a 520 million ADA deficit remains compared to their holdings during the April peak, indicating a potential pathway to doubling ADA’s price if these holdings are replenished.

Network Participation: A Crucial Indicator

The Daily Active Addresses (DAA) on the Cardano network have historically shown a strong correlation with ADA‘s price movements. A peak in DAA in February 2023 preceded a price surge, with similar trends observed in subsequent months. However, recent weeks have witnessed a decline in network participation, with DAA failing to cross the 40,000 mark and recording a low of 28,538 on October 19.

This decline in network interaction, marked by reduced usage of ADA in daily transactions, offers an explanation for ADA’s subdued price performance compared to the broader market trends. To instigate a price surge, historical trends suggest that surpassing 70,000 DAA and a significant increase in whale holdings could be pivotal.

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ADA Price Prediction: A Journey to $0.50?

From an on-chain perspective, bolstering whale holdings and increasing network participation could potentially double Cardano‘s prices. However, resistance at the $0.27 mark presents a notable hurdle. A decisive breakout from this resistance, fueled by intensified buying from whales, could set ADA on a trajectory towards $0.50.

Conversely, a price reversal below $0.20 could lead to a prolonged downward trend, making the support at $0.24 crucial for preventing historical losses and catalyzing a rebound.

Connect with Collin Brown on X (Twitter) for valuable market insights, frequent updates, and a touch of humor!
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Collin Brown
Collin Brown
Collin is a Bitcoin investor of the early hour and a long-time trader in the crypto and forex market. He's fascinated by the complex possibilities of blockchain technology and tries to make matter accessible to everyone. His reports focus on developments about the technology for different cryptocurrencies.
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