Cardano’s recent performance has sparked significant controversy as the cryptocurrency has lost 8.77% of its value in just 24 hours, raising some concerns about its future.
Despite the bearish sentiment prevailing in the markets, some analysts still argue that Cardano could see a potential rally and suggest that ADA could reach staggering highs.
According to analyst Ali Martinez, Cardano’s historical price action suggests that it could first experience a pullback and then surge to an impressive high of $6 based on previous cycles.
Let’s examine Cardano’s recent price drop and expert predictions that advocate for a $6 potential despite the general bearish sentiment in the markets.
As of today, ADA has seen a significant decline and is trading at $0.9013 after its peak of $1.3. Market sentiment is quite negative, as the weekly chart has seen a notable 14.45% decline. This has led many investors and analysts to question the reasons for Cardano’s difficulties and its future direction.
Ali Martinez stated in his latest analysis that Cardano reflects its past cycles and forms a similar pattern to the price movements in early 2020. Martinez emphasized that the current price marks a significant turning point, reminding that a similar situation was seen before the correction in 2020. After this period, ADA gained an impressive 750% from $ 0.12 to $ 1. This historical example provides a reasonable basis for expecting a rise after the current market correction.
Despite the historical context, current data paints a pessimistic picture for Cardano. On-chain activity, which confirms price movements, has shown a significant decline. Cardano’s Price DAA divergence is negative, indicating a disconnect between ADA’s price and actual on-chain growth. This is also playing out among large investors, as large transactions have fallen to monthly lows, indicating a pause in trading activity.
Cardano’s NVT ratio is showing a frightening increase in the market, suggesting that its market cap is outpacing on-chain transaction growth. The NVT ratio has risen from 9.17 to 38.12, suggesting that prices are being driven by speculation rather than actual adoption. A tangible increase in active addresses and transaction volumes is critical for Cardano to achieve sustainable growth.