Examining Cardano’s 52% hike and what NFTs have to do with it

• Cardano’s NFT daily volume hit new highs with a 52.71% hike over the last 24 hours
• ADA’s price surged, however, profitability of addresses remains low

Cardano [ADA] registered a massive decline in price over the past month. And yet, despite how it has been doing on the price front, interest in its ecosystem remains as high as it ever has been.

NFT market sees growth

According to data accessed by AMBCrypto, Cardano’s NFT daily volume soared, going past 450,000 ADA following a remarkable 52.71% hike in the last 24 hours alone. Additionally, the network saw robust activity, successfully completing 150,000 payments within the same timeframe, marking a significant 24.52% increase in overall activity.

Both these findings are a sign of a thriving ecosystem, a sign of sustained usage and adoption of Cardano’s network.

Despite the heightened activity, however, Cardano recorded a 35.7% decline in fee generation over this period. Also, interest in ADA staking remained consistent, with the reward rate holding steady at 2.98%.

Source: Staking Rewards

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How is ADA doing?

ADA’s price has endured a tumultuous journey since 26 March, plummeting by 28.9% on the charts. It has since seen multiple lower lows and lower highs, indicative of a bearish trend. This downtrend may have been influenced by broader market sentiments and the price of BTC as well.

And yet, after testing the $0.4-resistance level, ADA’s price rallied significantly, breaching $0.472 and shattering previous lower highs, signaling a potential reversal of the downtrend. With sufficient momentum, ADA could target the $0.600-threshold.

At the time of writing, ADA’s Relative Strength Index (RSI) had a reading of 55.95 – A sign of balanced market sentiment. This also implied that the buying momentum around ADA hadn’t completely dwindled yet.

Source: Trading View

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However, despite the price surge, the MVRV ratio for Cardano remains negative, indicating that holders are not currently in profit. This lack of profitability reduces selling pressure on ADA, potentially contributing to price stability and resilience against market downturns.

Read Cardano’s [ADA] Price Prediction 2024-25

Interestingly, while ADA’s price hiked, the velocity around Cardano noted a decline, indicating a decrease in the frequency of ADA transactions. This trend suggests that while ADA holders are not selling due to a lack of profitability, there has also been a fall in overall trading activity within the Cardano ecosystem.

This could be interpreted as a sign of long-term investor confidence in ADA’s potential. Especially as holders choose to HODL their tokens rather than engage in short-term trading activities and profit-taking.

Source: Santiment