Crypto exchange Kraken says that the current price movement of Cardano (ADA) relative to its daily transaction could be a bullish indicator for the sixth-largest cryptocurrency by market cap.
In a new report, Kraken says that, while ADA’s price is strongly correlated with the volume of network activities, this has not been the case since late 2021 when Cardano’s price failed to keep up with the increase in its daily transactions.
“Throughout the course of 2020 and 2021, per figure 13, there was a strong correlation between ADA price movement and daily transactions. This relationship sustained until November 2021 when we saw the price of ADA trickle off while daily transactions saw a slight uptick.”
Kraken says that a “buy the hype, sell the news” pattern characterizes the market activities leading to Cardano’s upgrades, but the current relationship between ADA’s price and transaction volume suggests dwindling hype over the network.
The exchange says that ADA is undergoing a correction phase and is still on track for growth as decentralized apps (DApps) launch on the network.
“This could be a bullish indicator for ADA that the asset is in a correction cycle due to a drop in hype rather than exodus of the network. This is important to consider particularly as the long-anticipated launch of DApps on the network begins to roll out.”
At time of writing, ADA is trading at $1.05.
Check Price Action
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Natchapol18/KHIUS