- The correlation coefficients indicate roughly parallel market movements.
- On-chain data suggested that holders should expect further gains in the future.
According to IntoTheBlock, Cardano [ADA] Strong correlation with avalanches [AVAX] and polygon [MATIC] More than any other top cryptocurrency.
At the time of writing, the correlation between ADA and AVAX was 0.99. For MATIC, it was 0.98 over 60 days. The correlation coefficient value ranges from -1 to +1, with the former indicating a large deviation.
on the other hand, read Being close to +1 suggests a strong directional movement, as is the case with Cardano and the other two. At the time of writing, ADA was priced at $0.45, down 26.40% on a year-to-date (YTD) basis.
Source: IntoTheBlock
Deep sea trio
AVAX was worth $36.94, down 11.73% within the same period. Finally, MATIC was trading at $0.71, indicating a decline of 29.21%.
To see if Cardano will continue to move in the same direction as AVAX and MATIC, AMBCrypto looked into the sentiment surrounding these projects.
Looking at the weighted sentiment index provided by Santiment, ADA had a reading of -1.613. For AVAX, the reading was -1.018 and for MATIC, it was -1.544.
Weighted emotions show Unique social volume, as measured by comments on an asset. When the metric is positive, it means market participants are bullish and demand for the related asset is likely to increase.
However, all three were negative, indicating low confidence in their potential. Based on this trend, the prices of ADA, AVAX and MATIC may fall again.
Source: Santiment
At the same time, such highly negative sentiment may indicate a good period for accumulation before a major surge emerges.
The token may soon return to bull market
But to be sure, you need to analyze the Market Value to Realized Value (MVRV) ratio. This metric tells you whether a cryptocurrency is undervalued or not.
The higher the MVRV ratio, the more profitable holders are and the more motivated they are to sell. Decreased This indicator suggests that more holders are sitting on unrealized losses.
In this case, most people will decide to HODL. At the time of writing, Cardano’s 30-day MVRV ratio was -5.313%, meaning that if all ADA holders who accumulated in the past 30 days sold, they would incur unrealized losses.
For MATIC, that metric was 1.608%. However, what AMBCrypto noted was that the ratio had decreased. Therefore, it can be inferred that the token was undervalued during bull market conditions.
Source: Santiment
Whether realistic or not, AVAX’s market capitalization in terms of ADA is as follows:
If the price starts to recover, ADA could rise to $0.67, and if AVAX follows suit, the token could rise to $50.35.
Moreover, if MATIC bounces back, the price could head in the direction of $1.06.
