Cardano (ADA) has seen a steady price decline since early December, hitting a monthly low of $0.86. This drop has left investors anticipating a bleak start to the year.
However, market signals suggest a potential buying opportunity for those willing to take a long-term view.
Cardano Investors Have an Opportunity
Cardano’s MVRV (Market Value to Realized Value) ratio indicates a potential buying opportunity. Currently, the ratio is in the range of -13% to -26%, an area historically considered an accumulation zone for ADA. When the MVRV ratio reaches this range, the altcoin often bounces back, offering substantial recovery potential for investors.
Accumulating the altcoin at these levels could yield positive returns, especially as it has shown resilience in similar scenarios in the past. While current sentiment remains cautious, the MVRV zone suggests that ADA is undervalued, making it an attractive option for strategic investors.
Cardano MVRV Index. Source: Santiment
The macro moment, however, presents challenges. The Network Value to Transactions (NVT) ratio is at a 22-month high, signaling a bearish trend. A high NVT ratio indicates that network valuation is significantly outpacing its transactional activity, reflecting weak on-chain demand and reduced investor interest.
This disparity suggests that while Cardano’s market cap remains elevated, its real-world utility and adoption are lagging. Investors should consider this imbalance when assessing the altcoin’s potential for short-term recovery or long-term growth.
Cardano NVT Index. Source: IntoTheBlock
Price prediction
Cardano is currently trading at $0.86, a monthly low that reflects its recent decline through the $0.87 support level. This price point, coupled with mixed signals from market and macro indicators, leaves ADA in a precarious position.
In the short term, the asset could consolidate between $0.87 and $1.00, provided no significant bullish or bearish signals emerge. This range could serve as a stabilization zone for the altcoin as investors await stronger signals from the broader crypto market.
Cardano Price Analysis. Source: TradingView
However, failure to reclaim $0.87 as support could take the asset to its next support level of $0.77. Such a fall would reinforce bearish sentiment and delay any recovery, highlighting the importance of this critical price point for ADA’s short-term trajectory.
The article Cardano Hits Monthly Low: What’s Next? appeared first on BeInCrypto.
