An important on-chain metric for Cardano (ADA) recently hit an all-time high (ATH), highlighting the confidence in the crypto token despite its underperformance. This and several other bullish metrics suggest that a significant rally may be on the horizon for Cardano.
Long-Term ADA Holders’ Holdings Hit All-Time High
The market intelligence firm IntoTheBlock revealed in an X (formerly Twitter) post that the percentage of ADA tokens held by long-term holders is at an ATH, with nearly 40% of the token’s supply held by this category of investors. These long-term holders refer to investors who have held ADA for over a year.
As noted by IntoTheBlock, this development demonstrates a significant level of confidence among these holders, especially considering how Cardano has performed so far in this market cycle. ADA is currently the worst-performing asset this year among the top ten cryptos by market cap, with a year-to-date (YTD) loss of over 43%.
Despite this, Cardano’s long-term holders have chosen to increase their holdings instead of offloading them, highlighting their confidence in the token’s potential. It is worth mentioning that a significant number of these holders are also likely out of the money, as data from IntoTheBlock shows that only 18% (784,110) of ADA addresses are in the money. For context, there are 3.2 million addresses that currently fall under the long-term holders category.
Meanwhile, IntoTheBock also highlighted how the confidence in ADA has extended to its network activity. Network transaction count and active user base metrics have remained stable since April, further disproving critics who have called the Cardano network a ‘ghost chain.’ This indicates how committed the Cardano community is to the ecosystem.
IntoTheBlock further noted that Cardano records approximately $7.2 billion daily in on-chain volume, which puts it well ahead of many other networks. This has resulted in a low Network Value / Daily Transaction Volume (NVT) ratio of around 2.62, indicating that ADA is undervalued at its current price.
Cardano Adoption Has Stagnated
Cardano’s adoption remains a concern amid these bullish on-chain metrics. As against the impressive growth that the network experienced in the last cycle, IntoTheBlock noted that ADA has faced a challenge in attracting new users in this current cycle. The total number of Cardano addresses with a balance has remained around 4.45 million for over a year.
So far, most of the attention has shifted to networks like Solana and Ethereum layer-2 network Base. The influx of new users in the Cardano ecosystem is critical for any price surge that the crypto token could enjoy. These users will cause new money to flow into ADA, leading to rallies for the token as it enters price discovery.
At the time of writing, Cardano is trading at around $0.33, down over 1% in the last 24 hours, according to data from CoinMarketCap.