Cardano, the popular blockchain platform, has witnessed a notable rebound after reaching a low point of around $0.23 following the collapse of FTX. However, recent on-chain data analysis reveals crucial insights into whether that dip was indeed Cardano’s bottom.
According to insights from on-chain analytics firm Santiment, three critical metrics for ADA experienced significant surges when the price hit the $0.23 low. The first metric, “trading volume,” measures the daily amount of Cardano transacted on the blockchain.
Analyzing Cardano Trading Volume: Insights Into Market Activity And Investor Interest
When the trading volume metric increases, it indicates a substantial number of Cardano tokens being actively traded within the network. This surge in trading volume can be seen as a sign of heightened trader activity in the Cardano ecosystem. Conversely, lower values for this metric may suggest a lack of interest in the coin among general investors, implying a less active market.
The second key indicator, “daily active addresses,” measures the number of unique ADA addresses participating in transactional activities on a daily basis. This metric provides insights into the level of market activity. However, unlike trading volume, daily active addresses reflect the number of users engaging with the network.
While a few significant moves by whales may inflate the trading volume, the daily active addresses metric would contradict such market activity since fewer users are involved in such scenarios. Therefore, combining both indicators offers a more accurate picture of the market dynamics.
Below is a graphical representation illustrating the trajectory of the Cardano indicators during recent months.
A chart depicting the trends in these ADA indicators over the past few months showcases an intriguing pattern. The trading volume and daily active addresses spiked during the asset’s price decline, reaching a low of around $0.23.
This indicates that the total number of users and the volumes they transacted significantly increased during this price plunge. The chart also features data for the third metric, “social dominance,” which reflects the percentage of social media discussions related to the top 100 cryptocurrencies by market cap that revolve around Cardano.
Remarkably, Cardano’s social dominance also experienced a surge during the same period as the other indicators. This suggests that interest in ADA surged on social media platforms as its price rapidly declined.
Considering the simultaneous rise in all these metrics during the formation of the price low, it is possible that genuine interest in buying the dip emerged across the market. If this holds true, Cardano may have potentially reached its bottom, indicating a favorable outlook for the cryptocurrency moving forward.