- ADA’s performance fueled by rising net positioning and another notable change
Altcoin shares a strong correlation with LTC, indicating that its price might continue to climb
As a seasoned crypto investor with a keen interest in on-chain analysis and market trends, I’ve been closely monitoring the recent surge in Cardano (ADA). The token’s performance has been fueled by rising net positioning and another notable change – an increase in Mean Coin Age (MCA) and Open Interest (OI).
In the past week, the price of Cardano‘s [ADA] cryptocurrency surged by an impressive 20.75%, reaching a new peak of $0.42. Previously struggling among the top 10 digital assets, ADA’s significant price increase propelled it to the position of the best performer in this group.
As a researcher examining the cryptocurrency market, I’ve discovered that ADA‘s meteoric rise wasn’t without foundation. Based on AMBCrypto’s insightful on-chain analysis, I found that the Mean Coin Age significantly contributed to its price surge.
The MCA, or Mean Coin Age, is a term frequently used to signify the calculation of the typical age of all the tokens existing on the blockchain. An uptick in coin age implies that cryptocurrency owners are transferring their older tokens from one wallet to another.
Less distribution, more interest and accumulation
In the majority of situations, this circumstance results in a wider spread between buy and sell prices, which tends to drive down the coin’s value. Conversely, when the average age of coins held increases, it indicates that investors are hoarding their coins off exchanges.
Based on our investigation with Santiment’s data, we found that the average number of days Cardano tokens remained in holders’ custodial wallets decreased to 34.71 over a 90-day period. This observation suggests that some Cardano investors have been transferring their assets into non-custodial wallets.
If this remains the case, there is a high chance that ADA’s price would move closer to $0.45.
One potential way to rephrase this sentence in clear and natural language is: The Open Interest (OI) serves as another significant factor contributing to the price surge. In simpler terms, when the OI grows, it signifies an uptick in traders’ overall positions in the market. Essentially, a rise in OI implies that more traders are entering the market by opening new contracts, thereby increasing the liquidity.
When the OI decreases, traders are liquidating their positions and taking their funds out of the market. This action can potentially lead to a drop in price.
At the current moment, the Open Interest for Cardano reached an impressive peak of $613.12 million based on on-chain data. This marked the highest figure recorded in over a month.
If the value keeps increasing, it may provide further support for Cardano’s upward trend. In such a case, there’s a strong possibility that the price of ADA, its native token, could reach $0.45.
If Litecoin moves, will Cardano follow?
Additionally, AMBCrypto’s analysis of Cardano’s correlation with other cryptocurrencies suggested that the price might continue to climb too. Of all cryptos in the top 20, Litecoin [LTC] is the one ADA shares the strongest correlation with.
According to IntoTheBlock’s data, the Correlation Matrix measures the relationship between different assets with a range from -1 to +1. A value near -1 signifies price disparities, while a value approaching +1 indicates that asset prices generally move in sync.
Realistic or not, here’s ADA’s market cap in LTC terms
A similar situation occurred with ADA and Litecoin (LTC). Notably, both their prices reached new highs within the past week.
At the current price of $70.56, it’s likely that if the value of Litecoin (LTC) goes up further, the price of Cardano (ADA) may also rise in response.
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2024-07-14 02:15