Cardano ADAUSDT’s rally may be ready to continue following its impressive 65% price surge over the past week. This outlook stems from its historical performance and expected investor behavior.
ADA is currently trading at $0.72, its highest level since March, and could see further gains. This on-chain analysis sheds light on why this is happening, even as some analysts are calling for a major correction.
History suggests Cardano’s breakout may just be beginning
A key indicator that indicates this outlook is the market value to realized value (MVRV) ratio. MVRV is a metric that compares the market value of a crypto asset to its realized value. The ratio identifies potential market tops and bottoms and provides insights into investor behavior.
Generally, the higher the MVRV ratio, the higher the profitability and willingness of holders to sell. However, when the ratio decreases, it means that unrealized gains are decreasing and investors may be less inclined to liquidate their assets.
For ADA, the 30-day MVRV ratio is -7.27%, indicating that if all Cardano holders sold, the average return on investment could be a loss. Historically, when the ratio is at this level, it means that the price of ADA is likely to continue to climb.
As shown below, ADA’s MVRV ratio was 55.56% before a pullback occurred in March. Therefore, if history repeats itself, the price of Cardano could rise well above $0.72 in the short term.
Additionally, Robinhood’s relisting of the cryptocurrency suggests that demand for ADA could surge — especially from the U.S. If this is the case, predictions of higher values could become a reality.
In addition, the historical in-the-money/out-of-the-money (HIOM) indicator, which assesses the difference in profitable addresses to measure market momentum, also supports this outlook. A decline in this indicator indicates that more holders are out of money, which usually prevents new investment.
However, in the case of Cardano, the percentage of addresses in profit has risen, which may encourage OTC investors to buy ADA in the short term. If this buying pressure materializes, it could push the value of the cryptocurrency even higher.
ADA Price Prediction: 500% Rise Possible?
On the weekly chart, Cardano’s rally appears to be mirroring the trend from 2020 to 2021, during which time ADA surged 3,653%. The previous surge was triggered by a bullish crossover of the 20-week exponential moving average (EMA) above the 50-week EMA.
During this period, ADA climbed from $0.061 to $2.29. Currently, the 20 EMA (blue) has just crossed the 50 EMA (yellow), indicating that the coin has rekindled bullish momentum. While a similar percentage rebound is unlikely, if past performance influences future trends, ADA could still see a massive rise of up to 500% in the coming months.
If this happens, ADA could rise to $2.03. Bitcoin’s rise could also accelerate this scenario, especially since Cardano seems to have a strong correlation with it. However, this may not happen if the selling pressure intensifies. Instead, ADA could fall to $0.33.
