The price of Cardano has crashed in recent months, mirroring the performance of other cryptocurrencies. After peaking at $1.326 in December, ADA retreated by 45% and moved below the key psychological point at $1. So, is the Cardano price about to surge as the number of active addresses rises?
ADA Addresses Are Rising
The number of active Cardano addresses is rising, potentially signaling ongoing accumulation by investors.
Santiment data shows that the number of Cardano addresses has jumped in the past few weeks. These monthly addresses have soared to 555k, the highest level since February 15. They have jumped from a low of 488k earlier this month.
This increase happened after Donald Trump named Cardano one of the top coins that will be included in the strategic crypto reserves. Other USA coins that will form part of this portfolio are XRP and Solana.
Meanwhile, the number of addresses rose as Cardano’s valuation became cheaper. The closely-watched Market Value to Realized Value (MVRV) has dropped, reaching its lowest level since March 2. An MVRV-Z score ratio below 0.2 is a sign that a crypto coin is undervalued.
Cardano faces some major challenges ahead. The most notable challenge is that network activity remains weak. Data by DeFi Llama shows that the stablecoin market cap stands at $24 million, much lower than that of most other blockchain networks.
Furthermore, the total value locked (TVL) stands at about $348 million, significantly lower than that of newer networks such as Berachain, Sonic, Zircuit, Base, and Arbitrum.
Cardano Price Analysis
The weekly chart shows that the price of ADA has remained in a tight range over the past few weeks. The coin has dropped by over 44% from its highest level earlier this year.
Cardano has moved below the 23.6% Fibonacci Retracement level at $0.913 and crashed below the important support level at $0.804, the highest swing in March last year.
On the positive side, the coin has stayed above the 100-week Exponential Moving Average (EMA) and has also risen above the ascending trendline connecting the lowest swings since January 2023.
The ADA price is currently in the second phase of the Elliott Wave pattern. It will then move to the third wave, usually the bullish sign.
Therefore, the price of Cardano may soon experience a strong breakout, particularly as the ADA ETF approval odds increase. In this case, Cardano may jump to $1.326, the highest swing in December last year, which is about 82% above the current level.
If the price drops below the 100-week moving average at $0.60, it will invalidate the bullish outlook and could lead to further declines to $0.50.
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