The price of the smart contract platform Cardano ($ADA) has recently fallen to a $0.23 low after the cryptocurrency was said to be a security in lawsuits filed by the U.S. Securities and Exchange Commission (SEC) against leading exchanges Binance and Coinbase, while some of its metrics rose to yearly highs.
While the price of $ADA has recently recovered to $0.275 at the time of writing, data from on-chain analytics firm Santiment shows that some of the cryptocurrency’s metrics are showing its adoption is growing. These metrics could offer valuable indications of whether this price represented the bottom for Cardano.
📈 The #Cardano capitulation happened more notably than other #altcoins during Friday's crash. After prices fell -35% between June 5-9, the #buythedip opportunity came when $ADA volume, address activity, and social dominance all hit 2023 highs on Saturday. https://t.co/GJ1teKN3ed pic.twitter.com/ni5MILllNr— Santiment (@santimentfeed) June 12, 2023
According to Santiment, Cardano’s trading volume has peaked recently as activity on the network grows along with interest in the cryptocurrency. When trading volume increases, it signals a high degree of activity on the network, indicating that traders are actively engaging with the asset. Conversely, low trading volume suggests a relative stagnation, potentially reflecting a lack of investor interest.
The second pertinent metric, daily active addresses, also reached a year-to-date high. This indicator measures the total number of unique Cardano addresses that engage in transaction activity on the blockchain.
Using both trading volume and active addresses is important, as large network transactions could otherwise give the impressions of a highly active market, an impression that might be contradicted by the daily active addresses metric if the number of users involved is relatively low.
Moreover, Cardano’s social dominance has also surged. The metric quantifies the social media discussions on the top cryptocurrencies that specifically mention the smart contract platform.
Analysis of these metrics demonstrates that both the number of users and the total amounts they were transacting increased significantly as the price of the asset dropped. Therefore, these indicators might suggest that there was substantial interest in purchasing the asset at this lower price point, potentially indicating that the market has bottomed out for Cardano.
However, it is critical to remember that these data points are not definitive. They merely provide one perspective on the market dynamics at play, and the actual bottom could be influenced by a variety of other factors, both quantifiable and not.
As CryptoGlobe reported, popular commission-free trading platform Robinhood is rethinking its support for multiple cryptocurrencies, according to the firm’s Chief Legal Officer Dan Gallagher, in light of the SEC’s crackdown on crypto exchanges. These include ADA, SOL, and others.
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