Cardano May Double in Price Soon, Indicator Suggests

Cardano May Double in Price Soon, Indicator Suggests
  • Cardano may double in price after 3 months based on MVRV Z-score.
  • The MVRV Z-Score displays the difference between an asset’s market cap and realized cap.
  • Cardano’s price analysis recently displays a bullish sentiment.

Cardano`s (ADA) MVRV Z-Score shows the cryptocurrency has been trading at historically undervalued levels since April. The last time ADA’s MVRV Z-Score reached its current level was in October 2019. ADA price ultimately doubled in the following 3 months, according to Santiment data.

The MVRV Z-Score is a ratio that displays the difference between an asset’s market cap and realized cap. The score also displays the average variance of all previous market cap data.

This is a sign of undervaluation based on the average trader value loss. The MVRV Z-Score however, can not predict how long an asset will remain undervalued or overvalued and shows no discernible repeating pattern. 

How long the score spends in the green or red zones can also vary significantly, as the ratio doesn’t consider macroeconomic factors that affect price movements.

The MVRV Z-Score has a proven track record of accurately identifying the tops and bottoms of Cardano market cycles. A low MVRV Z-Score often signals a market bottom followed by an upturn, whereas a high MVRV Z-Score typically represents a market peak.

Similar changes occurred between October 2019 and January 2020, when Cardano’s price stayed low and then surged over the next three months.

As of this time, Cardano’s price analysis displays a positive emotion as the bulls have been successful in finding a means to retaliate following somewhat bullish price action. The price levels have increased to a value of $0.3486 due to the bullish push, which has been strong enough according to Coinmarketcap.

Cardano demand won’t stabilize until the general macro attitude in the world changes, and until then, $ADA may cycle in and out of the undervalued category.

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Godfrey Mwirigi is an enthusiastic crypto writer with an interest in Bitcoin, blockchain, and technical analysis. With a focus on daily market analysis, his research helps traders and investors alike. His particular interest in digital wallets and blockchain aids his audience in their day-to-day endeavors.

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