According to on-chain data, Cardano (ADA) has recently experienced a decline in wallet activity, raising questions about the underlying factors driving this trend and its potential implications for the cryptocurrency’s trajectory.
In a recent tweet, on-chain analytics firm Santiment presented a comparison of top-cap assets’ non-empty wallet amounts. It was highlighted that Cardano is one of the few networks to see a drop in active wallets, with non-empty wallets down 0.1% in the last three months. Dogecoin and BTC saw their non-empty wallets increase by 13.8% and 2.6%, respectively, within the said time.
📊 The total amount of non-empty #Bitcoin wallets are rapidly growing despite choppy prices. #Altcoin wallets for assets like #Dogecoin have flattened after enormous rises earlier this year. #Cardano is one of the few networks to see active wallets drop. https://t.co/itg9qMes7c pic.twitter.com/yrOlEQw3jy
— Santiment (@santimentfeed) April 27, 2024
Cardano’s market struggles are not limited to wallet activity alone. The cryptocurrency has experienced a 28.7% price decline in the last 30 days, according to CoinGecko data, albeit higher by 17.8% on a one-year basis. ADA has seen its ranking slip, now trailing behind Dogecoin (DOGE) and Toncoin (TON) to sit in the 10th spot.
At the time of writing, ADA was posting a rebound after declining to lows of $0.445 in yesterday’s trading session. ADA is currently up 2.2% in the last 24 hours to $0.4697.
Warning sign or opportunity?
The dwindling numbers might either be a warning, signaling a waning interest in Cardano, or an opportunity that signals undervaluation. However, it is essential to consider the broader context.
The entire crypto market is currently facing uncertainty and fluctuations in user activity are not uncommon. Periods of decline and consolidation are common before periods of renewed development and expansion, as projects adjust to changing market conditions.
However, Cardano’s upcoming upgrades, which might boost network fundamentals, and ongoing initiatives may offset these short-term trends.
Despite the current underperformance, historical data suggests that ADA could see a breakout, potentially reaching new highs.
In an early April post, crypto analyst Ali noted that nothing has changed for Cardano, which is currently stabilizing before a breakthrough. So far, Cardano has followed the pattern witnessed from 2018 to 2021, and if this fractal continues, ADA might jump to $1.70, paving the way for a breakout to $5.
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