In the dynamic world of cryptocurrency, Cardano (ADA) is capturing attention following Bitcoin’s (BTC) remarkable performance above $71k. With the altseason eagerly anticipated, Cardano has signaled a potential price reversal. This large-cap altcoin, which boasts a fully diluted market valuation of approximately $15.5 billion and witnesses a daily trading volume exceeding $373 million, saw a price increase of over 2 percent in the last 24 hours, reaching about 34 cents as of Tuesday, October 29, during the early New York session.
Cardano Price Signals Imminent Reversal Ahead
After enduring a macro correction phase for the past seven months, Cardano’s price against the US dollar is now indicating an unavoidable reversal in the near term. This Layer 1 (L1) altcoin has been gathering bullish momentum over the past four months, evidenced by a weekly reversal pattern that showcases a double bottom along with a bullish divergence in the weekly Relative Strength Index (RSI).
Crypto analyst Ali Martinez suggests that ADA’s price pattern mirrors the 2020 bull market’s fractal pattern. If history indeed repeats itself, we could witness a significant price surge around November 18, approximately two weeks after the US elections, with a potential market peak by September 2025.
The ADA/BTC pair has been revisiting its multi-year low, following a downtrend that began in the fourth quarter of 2021. This potential reversal could herald a new era of growth for Cardano in the evolving cryptocurrency landscape.
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Cautionary Take
Despite the promising signs, caution is advised as Cardano’s Network Value to Transactions (NVT) ratio has reached its highest point since June. This indicates a reduction in on-chain activity relative to the price increase, a classic sign of potential overvaluation. ADA’s recent underperformance suggests there might be further downside risks.
The Cardano network has seen stagnant growth in its total value locked (TVL) over the past year, especially when compared to other emerging L1 technologies such as Solana (SOL) and Toncoin (TON). While there have been significant developments, including the integration with the BOS bridge to leverage Bitcoin, the network has yet to spark the necessary on-chain activity.
According to insights from market data analytics firm IntoTheBlock, the ADA price might experience a pullback due to the observed low on-chain activity, highlighting the need for prudent market engagement in the near term.
