Is Cardano Overvalued? Indicators Suggests So After 180% Hike
Based on historical data, Cardano (ADA) may be approaching overvalued territory. This comes after a massive 180% price increase over the past 30 days.
To some investors, the timing may seem premature, especially as the highly anticipated altcoin season has just begun. However, on-chain indicators suggest that ADA may face a pullback before hitting new highs.
Cardano indicators flash bearish signs
A key indicator shows Cardano could be soon What is overvalued is the market value to realized value (MVRV) long/short gap. MVRV Long/Short Divergence checks whether long-term holders have more unrealized profits at the current price, or whether short-term holders have more unrealized profits.
When this indicator increases, it means that long-term holders have gained more. On the other hand, if it falls or falls into negative territory, it means that short-term holders have the upper hand.
This difference can also help spot when a cryptocurrency is undervalued or overvalued. watching historical dataCardano’s price reached an overvaluation point in March when the MVRV long/short difference reached 57.94%.
As shown above, the indicator’s reading has reached 52.71%, indicating that ADA may be close to being overvalued again. If verified, the price of the altcoin may experience A noteworthy correction.
In addition to this, IntoTheBlock data shows a spike in the Network Value to Transactions (NVT) ratio. The NVT ratio is a metric used to assess the valuation of a cryptocurrency relative to the value of network transmission.
When this ratio decreases, it means that trading volume exceeds market cap growth, indicating that the coin is undervalued. On the other hand, the current rise in the NVT ratio indicates that Cardano’s market capitalization is growing faster than its trading value. If this is still the case, then ADA may be flagged If the price is too high, the value may decrease.
ADA Price Prediction: Below $1
From a technical perspective, the daily chart shows that the Bollinger Bands (BB) have expanded. This significant expansion indicates that high ADA Volatilityindicating that price movements in the coming days may be high.
But beyond that, the upper band BB’s ADA price is $1.30. When the upper band of the indicator touches the price, it means it is overbought. On the other hand, when this happens on the lower track, it indicates an oversold condition.
Therefore, Cardano token appears to be overbought. Considering this condition, then Cardano price may drop to $0.92. On the other hand, if buying pressure increases, this may not happen because ADA may rise Above $1.40.
Disclaimer
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