- Cardano (ADA) is currently undervalued according to the MVRV 365D metric.
- The massive on-chain activity could see the price of ADA surge to new highs.
Cardano (ADA) has been trading in a price range of $0.95 and $1.63 in the last month. On the day, ADA is trading at $1.15, down 2.85% on the day. The price could however be poised for a strong upside correction. Going by the MVRV 365D chart shared by Ali Martinez, ADA is very undervalued at its current price.
The analyst asserts that the last time Cardano was this undervalued was during the COVID crypto market crash of March 2020, almost two years ago. At the time, the price of ADA closed the month of March down 35.5% with a price tag of $0.0831. The month was succeeded with a massive surge in the price of ADA that saw it trading at over $0.19.
The MVRV metric, or Market Value to Realized Value, helps investors to gauge the fair price of an asset. It essentially gives insight into the percentage of investors in an asset that are currently in or out of profit. It is often used to mark market tops and bottoms by noting how low or high it is.
Per data from Santiment, the MVRV 365D of the Cardano blockchain that measures the profit and loss status of wallets holding ADA bought in the last year shows that the investors are sitting on an average loss of -26%. This indicates that the price could be poised for a massive surge.
What could be the catalyst for a surge in ADA?
The metric is reflecting the market’s sentiment for the price of ADA. The Cardano blockchain is in the middle of a massive growth phase. Multiple decentralized applications (dApps) have been launched on both its testnet and mainnet. Sundaeswap, Minswap, Muesliswap, and VyFinance are a few DeFi platforms that have launched this year. The total value locked on Cardano’s DeFi platforms is around $100 million according to data from Defi Llama. Several more projects are in the works on the rapidly expanding ecosystem.
IOHK, the developers of Cardano, in response to the increased on-chain activity have outlined plans to scale the network. In their methodical pattern which has been often commended, IOHK has released a roadmap for scaling Cardano in 2022 that includes several new updates as well as parameter adjustments for the network.
The launches and planned scalability upgrades have been driving investment in the network. Data from WhaleStats shows that institutional-grade investors have been buying up ADA. A BNB whale wallet being tracked by the monitoring tool recently bought ADA worth $5.9 million.