Cardano price prediction – Perfect time to buy ADA after 25% dip?

ADA

As a researcher with experience in on-chain analysis, I believe that the recent price drop of ADA by 25% in the last 30 days presents an opportunity for potential buyers based on certain key on-chain metrics. The Relative Strength Index (RSI) of ADA is notably low compared to other cryptocurrencies, suggesting a potential buy signal.

According to Santiment’s latest update on platform X (previously known as Twitter), the price of Cardano [ADA] could potentially increase based on a bullish indication from an essential on-chain indicator.

Based on the Relative Strength Index (RSI), many leading cryptocurrencies by market capitalization are currently showing signs of being undervalued. The RSI, a frequently employed technical analysis tool, identifies these opportunities for potential buyers. Among them, Cardano emerges as a promising contender to buy at a lower price.
— Santiment (@santimentfeed) May 7, 2024

Based on the information from the on-chain data provider, the RSI indicator for Cardano’s (ADA) price movements can assist traders in determining if an asset is overbought or oversold.

“Notably low compared to other caps, making it a slightly better buying opportunity.”

As a crypto investor, I find the Relative Strength Index (RSI) to be an essential tool for gauging the momentum of asset price movements. By measuring both the magnitude and velocity of these price changes, the RSI provides valuable insights into the market’s direction. Moreover, it assists me in identifying potential trend reversals, helping me make informed decisions on buying or selling my crypto holdings.

As an analyst, I would interpret the RSI (Relative Strength Index) readings as follows: If the RSI reading surpasses 70, the asset is considered overbought, implying a possible correction in its price. Conversely, when the RSI falls below 30, the asset is considered oversold, suggesting an opportunity for potential upward price movement.

ADA’s RSI was 29.97 at press time, signaling that the coin was oversold.

Cardano price prediction – Perfect time to buy ADA after 25% dip?

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It’s crucial to examine the Market Value to Realized Value (MVRV) ratio of ADA to determine if now is a good time to purchase it.

As a financial analyst, I would describe this metric as follows: I calculate this ratio by comparing the current market value of a specific asset to the average purchase price of each coin or token that makes up that asset in my portfolio. This measurement helps me assess the profitability of my investments in that asset.

An asset with a MVRV (Market Value to Realized Value) ratio greater than 1 implies that the market value currently exceeds the cost basis for most investors, indicating potential overvaluation.

In simpler terms, when the Market Value to Realized Value (MVRV) ratio is negative for an asset, it indicates that the current market value is lower than the average cost at which its circulating tokens were bought. This implies that the asset might be undervalued.

As an analyst, I would interpret a negative MVRU (Market Value to Realized Universe) ratio for an asset as a potential buying signal. This means that the current market value of the asset is lower than its historical cost basis, indicating a discounted price. Therefore, if I observe this situation, I would consider purchasing the asset as it seems undervalued based on its past costs.

Read Cardano’s [ADA] Price Prediction 2023-24

The MVRV (Market Value to Realized Value) ratio calculated by ADA based on various moving averages showed negative results as per the data from Santiment. Specifically, the coin’s MVRV ratios for the 30-day and 365-day moving averages were -13.55% and -4.5%, respectively, at the time of analysis.

ADA exchanged hands at press time at $0.44, per CoinMarketCap’s data.

2024-05-08 19:04

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