Cardano has noticed some rally since it hit a low around the $0.23 level after the FTX crash. However, here’s what the data across the chain says about whether or not this bottomed out.
Three Cardano indicators appeared during the formation of the local bottom
According to data from the on-chain analytics company saintThree measures of ADA jumped to a 2023 high when the price hit a low of $0.23. The first of these metrics is “trading volume,” which measures the total amount of Cardano that is transferred on the blockchain each day by users.
When the value of this metric goes up, it means that a large number of asset tokens are being transacted on the network at the moment. This trend could be a sign that traders are currently active in the sector.
On the other hand, low values of the scale indicate that the market is showing low activity at the moment. This type of trend may indicate a lack of interest in the currency among the general investor.
The second important indicator here is “Daily Active Addresses,” which measures the daily total number of unique Cardano addresses that participate in some transaction activity on the blockchain.
This metric also gives us hints about how active the market is, but the main difference between daily active addresses and trading volume is that the former contains information about the number of users visiting the network, while the latter does not.
A few whales making large movements will appear as an active market given the trading volume, while the active titles may vary since there are not many users involved in such a scenario. Naturally, both of these indicators together can provide an accurate picture of the market.
Now, here is a chart showing the trend in these Cardano indices over the past few months:
Looks like the metrics have observed a sharp jump in recent days | Source: Santiment on Twitter
From the chart, it is clear that the daily active headlines and trading volume increased when the price of the asset was declining and reached a low around the $0.23 level.
This means that in terms of the total number of users and the total amounts they were transferring, the market turned out to be quite active during this price drop.
The graph also includes data for the third relevant metric here, ‘Social Dominance’. In short, this indicator tells us what percentage of social media discussions related to the top 100 cryptocurrencies by market cap come from posts about Cardano specifically.
ADA Social Dominance also rose at the same time as other indices, meaning that interest in the asset jumped on social media as the price dropped rapidly.
All of these metrics rising together while making that bottom could indicate that there is genuine dip buying interest across the market. Of course, if this is indeed the case, it is likely that the bottom will now be in Cardano.
ADA price
At the time of writing, Cardano was trading at around $0.27, down 22% in the past week.
ADA has been going up since the plunge | Source: ADAUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Santiment.net