In the past seven days, Cardano (ADA) has experienced a remarkable surge, with its price climbing nearly 80%. This impressive rally has captured the attention of both retail and institutional investors, propelling ADA to become the second-best performer among the top 10 cryptocurrencies. After briefly hitting $0.62 on November 11, ADA retraced to $0.60. While some market observers may consider this a sign of the rally losing steam, an in-depth on-chain analysis suggests that this pullback could be temporary, with the potential for further upside.
Cardano’s bull run began around November 6, when speculation surrounding a potential Donald Trump victory in the US elections seemed to influence market sentiment. Before the rally, ADA was trading at around $0.33, but within seven days, the price skyrocketed to $0.62, representing a significant increase of nearly 80%. However, after reaching this peak, ADA experienced a minor pullback to $0.60, leading some to question whether the rally had come to an end.
Despite this brief retracement, on-chain data and key market metrics point to continued bullish momentum for Cardano.
One of the most telling indicators of continued bullish sentiment is the rise in the Average Transaction Size on the Cardano blockchain. The Average Transaction Size, tracked by blockchain analytics platform IntoTheBlock, reflects the level of activity among both whales (large institutional investors) and retail traders. When this metric increases, it suggests that large players are actively participating in the market, driving speculative activity.
Over the past seven days, the Average Transaction Size for Cardano has risen to $171,588, signaling that institutional investors are significantly involved in the recent price movement. Historically, when large investors dominate, Cardano's price tends to continue its upward trajectory, even in the face of short-term pullbacks. For instance, in March, when the Average Transaction Size spiked, ADA rose as high as $0.74. If the current trend holds, ADA could revisit its $0.62 price level and potentially surpass it in the near future.
Another on-chain metric that supports the case for further price appreciation is the Mean Dollar Invested Age (MDIA). This metric tracks the average age of every dollar invested in a cryptocurrency, providing insights into the activity levels of ADA holders.
A rising MDIA suggests that coins are becoming dormant, with investors holding onto their positions rather than actively trading. On the other hand, a falling MDIA signals that more ADA tokens are being moved and traded, indicating increased market activity. This is typically a bullish sign, suggesting that more participants are entering the market, which could contribute to further price gains.Recent data shows that ADA's MDIA has been falling, signaling an increase in network activity and indicating that the market could be gearing up for another upward leg.
From a price prediction perspective, on-chain data reveals strong support levels for ADA at $0.59. According to the In/Out of the Money Around Price (IOMAP) model, which tracks the price levels where ADA holders have accumulated significant amounts of tokens, there is a substantial concentration of 1.79 billion ADA at the $0.59 price point. This cluster of holdings suggests a strong support zone, as 87,950 addresses are holding ADA at this price level.
Additionally, the IOMAP reveals that the volume of ADA purchased between $0.61 and $0.69 is lower, implying that $0.59 represents a stronger support level. Based on this data, ADA is well-positioned to maintain support at $0.59 and potentially push higher, with a short-term price target of $0.70.
Given the bullish trends in institutional activity, increasing network engagement, and strong support levels, ADA’s price outlook remains positive. If Cardano can hold above $0.59 and break through key resistance levels around $0.62 and $0.70, there is potential for the asset to retest its 2021 highs. A return to the $1 level is not out of the question, particularly if institutional interest continues to drive the price higher.
In conclusion, while ADA’s recent pullback to $0.60 may have raised some concerns, on-chain analysis suggests that Cardano is not done with its bullish run just yet. With institutional investors playing a key role in the recent price increase, and key metrics like the Average Transaction Size and MDIA showing strong signs of continued growth, ADA could continue to climb toward new highs in the coming weeks. Investors should keep an eye on support levels and be prepared for the potential to see ADA push past $0.70, with the long-term target of $1 becoming increasingly plausible as the market continues to evolve.
Cardano’s recent surge has generated significant interest among traders and investors. While short-term pullbacks are common, the increasing institutional involvement and strong on-chain metrics suggest that Cardano could be poised for further gains. Whether ADA hits $0.70 in the short term or reclaims its 2021 highs at $1, the bullish narrative for Cardano remains strong, making it one of the most promising altcoins in the market right now.
November 2024, Cryptoniteuae