- Cardano’s ADA has experienced a 25% price drop in the past month, hinting at a potential price rise.
- Key on-chain metrics suggest that it might be an opportune time to invest in this altcoin.
- On-chain data provider, Santiment, indicates that ADA’s Relative Strength Index (RSI) is notably low, presenting a potential buying opportunity.
Cardano’s ADA cryptocurrency could be on the brink of a price rally, according to key on-chain metrics. With a 25% price drop in the past month and a low RSI, now might be the time to invest.
ADA’s Price Drop and Potential Rally
Cardano’s ADA has seen a significant price drop of 25% in the past 30 days. However, key on-chain metrics suggest that this could be an opportune time to invest in the altcoin. According to on-chain data provider, Santiment, ADA’s Relative Strength Index (RSI) is notably low compared to other cryptocurrencies, making it a potential buy low candidate.
Understanding the Relative Strength Index (RSI)
The RSI is a momentum indicator that measures the speed and change of price movements. When the RSI returns a value above 70, the asset is considered overbought, indicating a potential price correction. Conversely, when the RSI is low and below 30, the asset is considered oversold, suggesting a potential upward price movement. At the time of writing, ADA’s RSI was 29.97, signaling that the coin was oversold and potentially due for a price rally.
Assessing ADA’s Market Value to Realized Value (MVRV) Ratio
Another important metric to consider when assessing whether to invest in ADA is the Market Value to Realized Value (MVRV) ratio. This ratio tracks the relationship between an asset’s current market price and the average price at which every coin or token was acquired. A positive MVRV ratio above one signals that an asset is overvalued, while a negative MVRV value indicates that the asset is undervalued. Currently, ADA’s MVRV ratio is negative, suggesting that the asset is undervalued and may offer a buying opportunity.
Conclusion
While ADA’s 25% price drop in the past month may seem concerning, key on-chain metrics suggest that this could be an opportune time to invest in the altcoin. With a low RSI and a negative MVRV ratio, ADA appears to be undervalued and may be due for a price rally. However, as with any investment, potential investors should conduct thorough research and consider their risk tolerance before investing in ADA or any other cryptocurrency.
