Although bitcoin is the undisputed star of the crypto ecosystem, there are coins that are beginning to overshadow it. One of them is cardano (ADA) has had an impressive start to the year as it broke through the $1 psychological barrier and hit an all-time high of $1.50. The impressive 590% year-to-date gain took place as the network transformed into a multi-asset blockchain network, similar to Ethereum, and this could bode well for the future of Cardano.
Cardano’s Coinbase listing helped drive open interest in its futures contracts above $1 billion, a sign that investors are seriously interested in ADA.
Cardano price on Binance, USDT. Source: TradingView
The final leg of the rally appears to be related to the Coinbase Pro listing, announced on March 16, and this resulted in a further push to $1.47 on March 18.
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As the price of Cardano increased, so did its spot and on-chain trading volume, surpassing Litecoin (LTC). Increased investor interest also caused the open interest for Cardano futures contracts to increase fivefold in 2021.
Breaking the $1 billion open interest barrier is a feat that only (BTC) and Ether (ETH) have achieved. Furthermore, Ether had an open stake of $2 billion just three months ago.
Therefore, to truly understand whether Cardano truly deserves the third position in the market cap ranking, one must compare its spot volume and on-chain metrics to other altcoins.
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Strengthening ADA Trading Volume and On-Chain Metrics
Regardless of price movement, the low trading activity reflects a small user base or lack of new entrants. Therefore, one should expect Cardano volume to be in the top 5.
Trading volume of the top 10 cryptocurrencies to date, USD. Source: Nomics
According to Nomics’ transparent trading volume, ADA had a trading volume of $97.5 billion in 2021, outperforming Polkadot (DOT), Ripple (XRP), and Litecoin.
While this is promising, one should also delve into on-chain metrics to understand if futures open interest and spot volume reflect this network activity.
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Daily active addresses provide a more detailed view of network usage. However, these data cannot be blindly trusted. The higher the rates, the less incentive there is to inflate the number.
Daily active addresses, 14-day average. Source: CoinMetrics
Cardano definitely seems to be decoupling from other altcoins, hitting 85,000 daily active addresses. Also, there seems to be no hint of fabricated numbers, as its growth trajectory appears organic and in line with volume activity.
To confirm whether those addresses have been active, transfers and transactions or the total amount of value that actually circulates in each network must be evaluated.
Transfers and transactions (USD) average of 14 days. Source: CoinMetrics
This time, Cardano’s strength is on full display, as the network’s daily transfers and transactions average $4.5 billion per day. That amount is at least six times greater than that of the rest of the competitors. Therefore, ADA’s on-chain activity provides some support for the $45 billion market capitalization.
Cointelegraph Markets Pro’s VORTECS data also began spotting the bullish outlook for ADA on March 16, prior to the recent price surge.
Exclusive to Cointelegraph, the VORTECS score is an algorithmic comparison of historical and current market conditions derived from a combination of data points, including market sentiment, trading volume, recent price movements, and trading activity. Twitter.
VORTECS score against ADA price (white). Source: Cointelegraph Markets Pro
As seen in the chart above, the VORTECS score recorded a high of 66 on March 16, twelve hours before Coinbase’s listing announcement. The cryptocurrency then rose to $1.23, an 18% gain since the signal surfaced.
On-chain volumes and data are important metrics, but Cardano might have a small window of opportunity to take advantage of challenges caused by congestion on the Ethereum network. The price of ADA could fall back unless use cases involving decentralized applications or working interconnectivity bridges are realized to solve the problem of decentralized financial scaling.
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Cryptoeconomy: Cardano Shows That It Is A Serious Competitor – TyN Magazine