The price of smart contract platform Cardano ($ADA) could be “severely undervalued,” as on-chain analysis suggests there is a bullish outlook for the cryptocurrency that could see its price rise.
That’s according to on-chain analytics firm Santiment, which revealed in its analysis that $ADA hark and whale addresses – those holdings between 100,000 and 10 million tokens – have been aggressively accumulating over the past six weeks, while the cryptocurrency’s price keeps on dropping.
As CryptoGlobe reported, sharks on the Cardano network have been steadily accumulating tokens since June and now control more than 4 billion $ADA, meaning they hold their largest percentage of the cryptocurrency’s supply in a year and a half.
In its latest Asset Report, CryptoCompare revealed that following the collapse of FTX there was a rising trend in users moving their assets off of centralized cryptocurrency platforms and moving them to decentralized solutions and self-custody.
The move, CryptoCompare wrote, led to a spike in average daily active users on the smart contract platform. In total, Cardano’s daily active users rose 15.6% to 75,800 last month, the highest number recorded since May.
Similarly, monthly transactions on the Cardano network also rose 5.34% to 2.32 million last month, marking the largest transaction volume since April.
Santiment’s analyst also noted that when looking at realized gains and losses there are signs sellers are exhausted, as on “every big price decrease there are fewer and fewer coins moving at a loss.”
Per the analyst, Cardano is facing a volume gap between the $0.19 and $0.26 marks, where he expects “serious buying” to take place. The analysts concluded:
Based on the things mentioned above, I believe price will increase in value. However, without any other data, it is difficult to accurately assess the validity of this analysis. It is important to consider multiple factors and carefully evaluate the available data when making investment decisions.
Messari also recently published a research report on Cardano, in which it reveals the cryptocurrency is lagging behind its main competitors. While it saw its decentralized finance activity surge this ear, with daily transactions leveling off at 60,000 since the second quarter of the year, its total value locked lagged when compared to market capitalization.
Per the report, Cardano’s market capitalization was nearly $15 billion at the time, while its total value locked was $78 million, giving it a market cap/TVL ratio of 190, significantly above that of rival smart contract platform Ethereum, which has a ratio of 6. Other competitors, Solana and BNB Chain, had ratios of 17 and 10, respectively.
Featured Image via Unsplash