Journalist
Posted:
- Cardano’s social activity has spiked in the past 24 hours.
- Coin’s social dominance is now at its highest point in six months.
Cardanos [ADA] Social dominance has risen to a six-month high despite double-digit price increases over the past 24 hours, Santiment data shows.
Source: Santiment
According to the data provider, ADA’s social dominance peaked at 85% between December 7 and 8. At the time of writing, the coin was still in an uptrend and the coin’s social dominance stood at 3.15%.
When an asset’s social dominance grows in this way, the currency becomes more talked about online. A coin’s social activity is measured by tracking the number of mentions on social media platforms, news articles, forums, and other online sources.
The price increase of ADA over the past 24 hours can be attributed to the surge in demand for the altcoin during that period. AMBCrypto found that on December 8, the daily number of addresses completing transactions with ADA increased by 31%.
Santiment data showed that the 72,821 daily active addresses recorded that day marked the single-day high in ADA’s daily active address count since November 18.
But there’s a catch
There is a close correlation between the social activity and the price activity of an asset. When social debate surrounding an asset rises alongside its price, there is always the possibility of a sharp correction.
In situations where the price increase is not caused by a significant ecosystem update, the increase in social dominance may be due to an increase in Fear of Missing Out (FOMO).
Are ADA holders profitable again?
The general market rally over the past month has caused the price of ADA to rise 62%. As the price of the alt grew steadily, transactions with the coin became increasingly profitable.
An assessment of the trade volume profit-to-loss ratio (a small 30-day moving average) put the benchmark at 1.02 at the time of writing. This suggested that for every trade that made a loss during that period, 1.02 ended in profit.
Similarly, ADA’s market value to realized value ratio (MVRV) has posted a positive value for the first time since April 2022.
The MVRV ratio tracks the ratio between the current market price of an asset and the average price of each acquired coin or token of that asset. A positive MVRV ratio above one indicates that an asset is overvalued and investors are staying above their cost basis.
How much are 1,10,100 ADAs worth today?
Conversely, a negative MVRV value indicates that the asset in question is undervalued. This means that if holders were to sell at the asset’s current price, they would realize losses.
At the time of writing, ADA’s MVRV ratio was 9.09%. This meant that if coin holders sold their coin at the current price, they would receive a guaranteed profit of at least 9.09% on their investments.
Source: Santiment