Data from analytics platform IntoTheBlock have illuminated a troubling trend within the Cardano (ADA) network, showing a significant dip in ‘profitability’ 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 ADA’s transactions now appear to be at a loss.
The chart below shows the percentage of holders in profit on several top layer 1 networks 👇
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 this… pic.twitter.com/x9YwfuNIN4
— IntoTheBlock (@intotheblock) April 24, 2024
Details Into ADA Investors Profitability
The report’s 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 ADA’s 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 token’s 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 ADA’s 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 ADA’s 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 #Cardano‘s MVRV Ratio dipped below -22%, $ADA‘s price soared by over 75%. With the #ADA MVRV Ratio back under -22%, we could see another…
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