Cardano (ADA) rally may be poised to continue following its impressive 65% price surge over the past week. This outlook stems from its historical performance and anticipated investor behavior.

Currently trading at $0.72 — its highest level since March — ADA could see further gains. This on-chain analysis reveals why this might happen, even though some analysts have called for a significant correction. 

History Suggests Cardano Breakout May Be Just Beginning

One key indicator suggesting this outlook is the Market Value to Realized Value (MVRV) ratio. The MVRV is a metric that compares the market value of a crypto asset to its realized value. This ratio identifies potential market tops and bottoms and offers insights into investors’ behaviors.

Typically, the higher the MVRV ratio, the higher the profitability of holders and their willingness to sell. However, when the ratio decreases, it means unrealized gains have reduced, and investors might not be inclined to liquidate their assets.

For ADA, the 30-day MVRV ratio is -7.27%, indicating that if all Cardano holders sell, the average return on investment could be a loss. Historically, when the ratio is at this level, it means that ADA’s price could continue to climb.

As seen below, it took an MVRV ratio of 55.56% for ADA to experience a correction in March. Therefore, if history repeats itself, Cardano’s price might rise much higher than $0.72 in the short term.

Furthermore, Robinhood’s relisting of the cryptocurrency suggests that demand for ADA might surge — particularly from the US. If that is the case, then the prediction of a higher value could become reality.

Also, the Historical In/Out of the Money (HIOM) metric, which assesses the difference in profitable addresses to

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Author: Victor Olanrewaju