Data from analytics platform IntoTheBlock have illuminated a troubling trend within the Cardano (ADA) network, showing a significant dip in โprofitabilityโ for its holders.
While cryptocurrencies like Bitcoin and TRX show a high percentage of holders in profit, Cardano stands in stark contrast, with only 35% of its holders currently seeing gains.
This insight into the Cardano ecosystem reveals deeper challenges, as many of ADAโs transactions now appear to be at a loss.
The chart below shows the percentage of holders in profit on several top layer 1 networks ๐
Bitcoin remains king, with $TRX being a close second. $DOGE and $ETH also have the vast majority of holders in profit. $ADA stands out with only 35% of holders in profit. But is thisโฆ pic.twitter.com/x9YwfuNIN4
โ IntoTheBlock (@intotheblock) April 24, 2024
Details Into ADA Investors Profitability
The reportโs specifics indicate that out of 1.59 million addresses holding 14.07 billion ADA, a substantial amount of these tokens were acquired at higher price points that are not profitable under current market conditions.
In particular, 2.73 million addresses are underwater, holding 20.07 billion ADA purchased at price levels between $0.5975 and $0.7265. This significant segment of loss-bearing investments places downward pressure on ADAโs market price, contributing to recent price volatility.
Despite the immediate bearish outlook, ADA has shown resilience with a weekly gain of 4.2%, bringing its price to $0.4661 at the time of writing. This slight recovery suggests that while short-term pressures are evident, investor confidence remains in the tokenโs fundamentals.
Notably, the crypto community is buzzing about potential future gains for ADA based on historical data and technical analysis. Prominent crypto analyst Ali has pointed out that ADAโs Market Value to Realized Value (MVRV) ratio is lower than -22%, indicating that the asset is significantly undervalued.
This situation is similar to June 2023, following which ADA experienced a substantial 75% increase in value. Ali forecasts a potential surge in ADAโs price to $0.80 from these past trends, which would mark a significant recovery and the highest value for the token in over a year.
The last time #Cardanoโs MVRV Ratio dipped below -22%, $ADAโs price soared by over 75%. With the #ADA MVRV Ratio back under -22%, we could see another impressive rebound! pic.twitter.com/ABf0mp4pR4
โ Ali (@ali_charts) April 19, 2024
Cardano Technical Analysis Supports Bullish Predictions
Another analyst, Trend Rider on X, further supported the optimistic projections for ADA and noted that Cardanoโs technical indicators signal a potential bull run.
According to Trend Rider, ADAโs Relative Strength Index (RSI) and Simple Moving Average (SMA) crossovers form a pattern that mirrors previous setups, leading to major price increases. For instance, a similar formation was observed before ADAโs monumental rise from $0.05 to $3.00.
This confluence of technical and market value analyses presents a compelling case for Cardanoโs potential turnaround. While current holder profitability is low, the technical indicators and historical performance suggest that ADA could be on the cusp of a significant upward trajectory.
Featured image from Unsplash, Chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
