Cardano (ADA) is one of the cryptocurrency industry’s most hyped altcoins. Ever since the project’s upgrade to support smart contracts, the dedicated community has pushed the network as a potential solution to Ethereum’s scalability issues. And while the coin has entrenched itself in the crypto market’s top ten (by market cap), a middling 2022-3 has seen ADA’s value drop by over 70%. However, after a strong October and improving fundamentals, perhaps the project’s fortunes are about to change.

Source: CoinMarketCap

Cardano Hits Major Activity Milestone 

According to blockchain analyst Santiment, Cardano “hit a major dormant coin activity milestone” on Monday. This essentially means that idle tokens sitting in wallets have re-entered the Cardano network for the first time in a while. It is the highest number of “old coins” being moved around the blockchain since April 2022, when the price of ADA was US $1.21 (AU $1.91). 

The renewed interest in the DeFi project hasn’t just been limited to old coins being moved. High-net-worth holders of ADA – those with between 100,000 and 10 million ADA in their wallets – have cumulatively added 43.71 million ADA to their portfolios in the last fortnight alone.

Source: Santiment/ X

Context Should Always Be Considered When Interpreting Data

While the recent surge in dormant addresses on the Cardano network appears to demonstrate a renewed interest at face value, this may not tell the whole story. As crypto analyst Chris O pointed out, much of the activity may have actually been artificial, due to the Cardano Foundation delegating ADA to new stake pools. How much this potentially contributed to the data is unclear, but it does demonstrate the necessity of applying context to “all-time highs” and other statements that may be a little misleading.

For example, when we contrast the Santiment information with Messari’s “Key Metrics Overview”, it appears that Cardano activity has actually dropped in the past quarter. Average active addresses, transactions and stakes are all down since Q2 2023, as are average dApp transactions. 

Meanwhile, Cardano’s total value locked (TVL) has had a stellar year, increasing by nearly 200% since Q1 2023. The main reason for this rocketing figure is the release of native stablecoins DJED and iUSD, which incentivised large, institutional investors to begin participating in Cardano’s DeFi ecosystem. However, these had little positive impact on the price of ADA or an increase in any other key metric.

All up, the news for Cardano’s project is a little mixed. The recent hike in dormant activity and accumulation may signal that the ecosystem is preparing itself for its next bull run, while other metrics suggest the community may have to continue waiting patiently for Cardano to deliver on its potential. 

The post Is Cardano Next in Line? Why it Might Just Be ADA’s Moment to Shine appeared first on Crypto News Australia.

Filed under: Bitcoin - @ November 1, 2023 2:47 am