Cardano (ADA) has been exhibiting a strong upward trend, with its price surging over 5% in the past 24 hours. This bullish momentum is fueled by a falling wedge pattern on the daily chart, suggesting that ADA is poised to break through a major resistance level and initiate a significant price rally.
Cardano’s recent price surge comes as it aims to reclaim its position among the top 10 cryptocurrencies by market capitalization.
To achieve this, ADA must surpass Tron, which currently holds a slightly higher market cap. While Cardano has made significant strides, it remains to be seen whether it can successfully overtake Tron.
On-Chain Analysis Reveals Potential Challenges
Despite the bullish outlook, on-chain data suggests that ADA may be facing certain challenges. The In/Out of Money Around Price (IOMAP) model indicates that a significant number of addresses holding ADA are currently underwater, meaning they purchased the token at a higher price than its current value. This could potentially hinder ADA’s price appreciation.
Furthermore, the NVT ratio, which measures the relationship between market capitalization and transaction volume, has been on the rise. This suggests that ADA’s price may be overvalued relative to its transaction activity. A high NVT ratio can be a concern, as it indicates that the market cap is not supported by sufficient transaction growth.
The Impact of the Chang Hard Fork
The upcoming Chang hard fork, which aims to enhance decentralization on the Cardano blockchain, is expected to play a crucial role in driving ADA’s price. Analysts believe that the upgrade could trigger a significant rally, potentially propelling ADA to new heights.
Also Read: Cardano’s Chang Hard Fork Delayed: New Date Set for September 1
Growing Network Activity and Whale Accumulation
On-chain data also reveals positive signs for Cardano. The number of active addresses on the network has been increasing, indicating growing user engagement. Additionally, large holders, known as whales, have been accumulating ADA, which can be seen as a bullish signal.
Cardano’s bullish momentum and positive technical indicators suggest that a significant price rally may be on the horizon. However, challenges such as the high NVT ratio and the need to surpass Tron’s market capitalization remain. The upcoming Chang hard fork could be a game-changer, but investors should remain cautious and conduct thorough research before making any investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
