Anika Begay
An important on-chain metric for Cardan (ADA) recently hit a all-time high (ATH)highlighting confidence in the crypto token despite its underperformance. This and several other bullish metrics suggest that a significant rally could be on the horizon for Cardano.
Long-Term ADA Holders’ Holdings Hit All-Time High
THE market intelligence firm IntoTheBlock revealed in an X (ex Twitter) send that the percentage of ADA tokens held by long-term holders is at an ATH, with nearly 40% of the token supply held by this category of investors. These long-term holders refer to investors who have held ADA for more than a year.
As noted by IntoTheBlock, this development demonstrates a significant level of trust among these holders, especially considering how Cardano has performed so far in this market cycle. ADA is currently the worst-performing asset this year among the top ten cryptocurrencies by market cap, with a year-to-date (YTD) loss of over 43%.
Despite this, Long-term Cardano holders have chosen to increase their holdings rather than dump them, highlighting their confidence in the token’s potential. It’s worth mentioning that a significant number of these holders are likely out of the money as well, as IntoTheBlock data shows that only 18% (784,110) of ADA addresses are in the money. For context, there are 3.2 million addresses that are currently in the long-term holders category.
Meanwhile, IntoTheBock also highlighted how trust in ADA has extended to its network activity. Network transaction counts and active user base metrics have remained stable since April, further refuting critics who have called the Cardano network a “Ghost Chain.’ This indicates how committed the Cardano community is to the ecosystem.
IntoTheBlock also noted that Cardano sees around $7.2 billion in on-chain volume per day, which puts it well ahead of many other networks. This has led to a low Network Value / Daily Transaction Volume (NVT) of around 2.62, which indicates that ADA is undervalued at its current price.
Cardano adoption is stagnant
Adopting Cardano remains a concern amidst these bullish on-chain metrics. Compared to the impressive growth the network has experienced in the last cycleIntoTheBlock noted that ADA faced a challenge in attracting new users in this current cycleThe total number of Cardano addresses with a balance has remained around 4.45 million for over a year.
So far, most of the attention has shifted to networks like Solana AND Ethereum layer-2 network foundation. The influx of new users into the Cardano ecosystem is critical to any price rally the cryptocurrency token could experience. These users will cause new money to flow into ADA, leading to rallies for the token as it enters the price discovery phase.
At the time of writing, Cardano is trading at around $0.33, down more than 1% in the last 24 hours, according to data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
