A key Cardano on-chain metric is flashing signs of undervaluation as its relative position compared to its realized value recorded the lowest since Jan 2019, Santiment observed.
MVRV-Z score [market-value-to-realized-value] is the difference between the market capitalization & realized value. ADA’s MVR-Z score for the first time in 45 months plummeted to a negative 1.35, indicating that the asset is highly undervalued.
An MVRV value of 100% [or 2.0] indicates that, on average, all holders will make a 100% [x2] profit if they sell their coins or tokens at the present price. The higher this ratio, the more frequently traders have historically shown a tendency to sell.
On the other side of the spectrum, a negative MVRV value indicates that the asset is “undervalued” on average. This means that if all coins were sold, most traders will be realizing losses at the asset’s current price.
Santiment also noted that the last time MVRV Z-Score hit this level, ADA’s price doubled for the following 3 months. Let’s see why this might be possible.
Despite being stuck in a bear market that has been going on for several weeks, Cardano’s on-chain activity is shooting for the moon.
Here’s Why Cardano Might Be Primed For A Price Upswing
According to reports, on October 17 and 18, Cardano’s NFT volume reached 3 million and 2.8 million ADA, respectively. The Cardano network consequently ranked as the third-largest NFT protocol.
There are several DeFi developers, investors, community members, and internet presences in the Cardano ecosystem. Although most initiatives have the potential to be fully developed, they haven’t yet.
Per DefiLlama, the Cardano network has a Total Value Locked of $11 million, whereby SundaeSwap, ADAX Pro, and MeawSwapFi lead with $10 million, $751k, and $35k, respectively.
Given the aforementioned facts, Cardano’s price may rise in the coming days because the token has proven its resiliency by enduring this long after the bull market of 2021 and the bear market of 2022.
As reported by TronWeekly, ADA, along with XRP, Bitcoin [BTC], and Binance Coin [BNB] have positive crowd sentiment on their side for the upcoming Q4, per data aggregator Santiment.
“The crypto crowd is far from euphoric toward markets. But the persistent negativity and bearishness have faded as traders anticipate a rebound here in Q4. XRP, ADA, BTC, and BNB all indicate crowd bullishness.”