Cardano (ADA) Demonstrates Holder Confidence Despite Subdued Price Action

Cardano (ADA) is demonstrating a robust signal of holder confidence despite its price remaining subdued. On Tuesday, on-chain analytics firm IntoTheBlock revealed a resilient

Despite remaining at a low price point, strong signals of holder confidence could indicate a promising future for Cardano (ADA).

On Tuesday, March 7th, on-chain analytics firm IntoTheBlock highlighted a resilient core of long-term investors in ADA, suggesting the potential for substantial upside despite current market conditions.

“This coin has a strong core of long-term holders despite the current price,” the firm noted in its analysis.

Among the key indicators, the firm pointed to the number of unique addresses holding Cardano, which have remained stable for over a year at around 4.45 million. This plateau marks a period of stabilization following a surge in address growth during the previous bull market, which saw the coin rally to an all-time high of $3.10 in September 2021.

However, IntoTheBlock also noted a challenge faced by the Cardano ecosystem in attracting new users, especially compared to other platforms.

“During the last cycle, Cardano experienced significant growth, positioned as a strong alternative to Ethereum,” the firm noted. “However, in the current cycle, the network faces challenges in attracting new users, with much of the attention shifting towards platforms like Solana and Base.”

As recently reported by ZyCrypto, Solana has garnered significant market interest, particularly due to its meme coin ecosystem, which has drawn attention away from Cardano. This shift in demand is evident as Solana's market capitalization has surged to the 5th position, reaching $68.27 billion, just below Ethereum. In contrast, Cardano has struggled to maintain momentum, slipping to the 10th spot with a market cap of $12.30 billion, even falling behind Dogecoin over the past week, according to CoinMarketCap data.

Despite the recent market shifts, several indicators suggest that Cardano may be undervalued. The network continues to handle an impressive daily transaction volume of approximately $7.2 billion, which contributes to a notably low Network Value to Transactions (NVT) ratio of 2.62, which, according to analysts at the firm, “could indicate ADA is undervalued.”

Moreover, Cardano's long-term holder confidence is at a peak. Nearly 40% of ADA's total supply is held by long-term investors, reflecting a high degree of commitment to the network's future. This substantial holding suggests that despite current price trends, there is a strong belief in the token's long-term value and potential.

In addition to these indicators, Cardano is set to advance its technological capabilities with the upcoming Chang hard fork, part of the network’s Voltaire Era. This significant upgrade aims to enhance decentralized governance and introduce new community-driven features. While anticipation around the hard fork is high, its immediate impact on attracting new users remains to be seen.

Given the current mixed developments, investors speculate whether the coin might be on the verge of a rebound. On Tuesday, analyst Trend Rider noted that ADA is maintaining crucial support around $0.32, following a notable bullish weekly rejection candle, emphasizing that “This could signal the bottom if the broader crypto market recovers.”

At press time, ADA was trading at $0.34, reflecting a 1.88% increase in the past 24 hours.

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