- The price of ADA has fallen 25% in the last 30 days.
- Readouts from key on-chain metrics suggest this might be a good time to buy the altcoin.
Cardano [ADA] could result from a price increase as a key on-chain metric provides a buy signal, Santiment noted in a new post on X (formerly Twitter).
📊 According to the Relative Strength Index, most of the market capitalization #cryptocurrencies are located in light buying zones. This popular momentum oscillator, often used in technical analysis, suggests #Cardano as a potential buy-low candidate. https://t.co/czXDUodAY3 pic.twitter.com/hhYEwIkQZT
— Santiment (@santimentfeed) May 7, 2024
According to the on-chain data provider, ADA’s Relative Strength Index (RSI), which helps its traders identify overbought or oversold conditions, is:
“Remarkably low compared to other caps, making it a slightly better buying opportunity.”
The RSI is a momentum indicator that measures the size and speed of asset price movements. Traders also use it to monitor potential trend reversals.
When it returns a value above 70, the asset is considered overbought and is in for a possible price correction. When the value is ‘low’ and below 30, the asset is oversold and there is potential upward price movement.
ADA’s RSI at the time of writing was 29.97, indicating that the coin was oversold.
Source: Santiment
Prepare to monkey around inside
To confirm whether the time is right to purchase ADA, it is important to assess the market value to realized value (MVRV) ratio.
This metric tracks the relationship between the current market price of an asset and the average price of each coin or token purchased for that asset.
A positive MVRV ratio above one indicates that an asset is overvalued. It suggests that the current market value of the asset is higher than the price at which most investors acquired their holdings.
Conversely, a negative MVRV value indicates that the asset is undervalued. It suggests that the market value of the asset in question is lower than the average purchase price of all tokens in circulation.
When an asset’s MVRV ratio is negative, it presents a buying opportunity. This is because the asset is trading at a discount to its historical cost basis at its current price.
Read Cardanos [ADA] Price forecast 2023-24
ADA’s MVRV ratio, assessed against several moving averages, returned negative values. Per Santiments data, the coin’s MVRV ratios on 30-day and 365-day moving averages were -13.55% and -4.5% respectively at the time of writing.
ADA was exchanging hands at $0.44 at the time of writing, per CoinMarketCaps facts.