Will Cardano’s Strong Long-Term Holder Base Support ADA Recovery?

• Cardano’s user base remains stable despite new market challenges.
• ADA’s low NVT ratio suggests it might be undervalued.

Prominent blockchain Cardano’s address count with a balance has remained around 4.45 million for over a year, indicating stability but also highlighting challenges in attracting new users. During the last cycle, Cardano positioned itself as a strong alternative to Ethereum , experiencing significant growth. However, in the current cycle, platforms like Solana and Base have garnered more attention, as noted by the data aggregator, IntoTheBlock.

Despite the slowdown in user acquisition, Cardano’s transaction count and active user base have remained stable since April. This suggests a committed community that continues to engage with the protocol. Moreover, Cardano settles approximately $7.2 billion daily in on-chain volume, surpassing many other networks. This results in a low NVT ratio of just 2.62, potentially indicating that ADA is undervalued.

Long-term confidence in Cardano is further demonstrated by the fact that nearly 40% of ADA’s supply is held by long-term holders, an all-time high. However, ADA’s price performance has been underwhelming. 

ADA Performance Analysis

Over the past month, the token has declined by 22%. Crypto analyst Max Maher identified three major reasons for this underperformance.

He noted that Cardano lacks a compelling narrative, unlike Solana’s memecoin craze or Ethereum’s ETF developments. Additionally, Maher pointed to network security, suggesting that Cardano’s core values remain misunderstood by many.

As of now, ADA is trading at $0.334, down 2.62%, with a 5% increase in trading volume, facing significant selling pressure. The daily RSI stands at 39, indicating a bearish trend. The 9-day EMA is at $0.3425. If bullish momentum returns, ADA could potentially rise to $0.3905 and $0.4212.

Conversely, if bears maintain control, the price could retrace to $0.3107 initially, with the possibility of further decline to $0.2778.

Analysts stress that Cardano’s future remains uncertain as it grapples with both challenges and opportunities. While its committed community and strong on-chain metrics suggest resilience, the lack of market headwinds may continue to weigh on ADA’s price performance in the near term.