Cardano Faces 22-Month Market Correction: Will ADA Hit All-Time Highs Soon?
Cardano Faces 22-Month Market Correction: Will ADA Hit All-Time Highs Soon?
healthy detector
December 29, 2024
Cardano, the ninth-largest cryptocurrency by market cap, is in troubled waters. The recent drop has investors worried about ADA, though a recovery is still possible.
After a steady decline since December, its price recently hit a monthly low of $0.84. This drop has raised concerns among investors about ADA’s near-term prospects, although there are subtle signs of a potential recovery.
Cardano’s market cap to realized value (MVRV) ratio, a vital metric, has fallen between -13% and -26%, an area often considered an accumulation zone. Historically, such numbers have been rallying points for the altcoin. Strategic investors with a long-term perspective may find ADA’s current pricing an attractive buying opportunity.
Sentiment
Source: Santiment
Despite the bearish sentiment, accumulation at these levels has proven fruitful in past cycles. The resilience during such market phases underscores Cardano’s potential for significant rallies, making it a promising option for patient stakeholders.
Cardano's NVT Ratio Hits New Record High
While MVRV points to optimism, Cardano’s macroeconomic indicators paint a mixed picture. The network value-to-transaction (NVT) ratio has risen to a 22-month high, revealing a decline in on-chain activity. A high NVT ratio often indicates that market valuation far exceeds the network’s utility, highlighting challenges in user adoption and real-world demand.
Despite the strong market cap, the disconnect between valuation and activity raises questions about Cardano’s near-term performance. Balancing these factors is crucial to making informed decisions about ADA’s growth trajectory.
According to the Brave New Coin ADA price index, which is trading at $0.88 as of now, ADA has seen a 7.70% decline over the past week. However, on-chain analysis reveals strong fundamentals. Nearly 2.71 million wallet addresses are still profitable, indicating a move away from overbought conditions.
ADA Price Index
Source: Brave New Coin ADA Price Index
Technical indicators are also pointing to stabilization after previous turbulence. The “golden cross” pattern formed in November continues, with the 50-day moving average ($0.890) above the 200-day average ($0.613). While the MACD indicates weak upward momentum, the decline in selling pressure points to a potential upside move.
Trading view
Source: TradingView
ADA Targets $4 by 2025
Market experts are optimistic about Cardano’s trajectory as 2025 approaches. Cryptocurrency analyst Yisriel’s predictions suggest that ADA could hit $4 soon, depending on market developments and the platform’s progress. Some analysts even predict prices could range from $5 to $16, perhaps in the event of a successful impulse correction.
ADA Targets $4 by 2025
Source: Yisrael
The planned integration of the Bitcoin OS Bridge is a pivotal factor. The move is expected to boost liquidity and adoption within decentralized finance (DeFi), strengthening Cardano’s technological backbone. The expansion of tokenized assets and distributed systems also reinforces the network’s strong foundation.
Cardano faces increasing competition from other cryptocurrencies, especially in the smart contracts space. These challenges also create opportunities for differentiation and innovation. A sustained surge in Bitcoin, with expectations of approaching the $100,000 mark, could provide a major boost to the altcoin sector, including Cardano.
Cardano’s current consolidation phase reflects the maturity of the market. The formation of the golden cross indicates a strong technical base for future growth. Moreover, strong on-chain metrics indicate that investor confidence remains intact. Support levels near $0.80 and resistance at $1.50 are critical thresholds to watch for ADA’s near-term trajectory.
