- ADA’s performance was driven by rising net positioning and another notable change
- Altcoin shares a strong correlation with LTC, indicating that its price could continue to rise
Cardanos [ADA] The price rose 20.75% over the past seven days, reaching a weekly high of $0.42. The price increase made the token, which was once one of the worst performers on the market, become the top gainer among the top 10.
However, ADA didn’t just rise to the top without any solid ground. According to AMBCrypto’s on-chain analysis, Mean Coin Age was one of the reasons why the price rose so much.
Often called by its short form, the MCA measures the average age of all tokens on the blockchain. When the coin age increases, it means cryptocurrency holders are moving their old tokens.
Less distribution, more interest and accumulation
In most cases this leads to distribution and has a negative effect on the price. On the other hand, when coin age declines, it means holders choose to keep their coins off exchanges.
In our analysis using Santiment’s data we have noticed that the 90-day MCA fell to 34.71. This indicated that Cardano holders have been putting their assets in non-custodial wallets.
Source: Santiment
If this remains the case, there is a good chance that ADA’s price will be closer to $0.45.
Another indicator responsible for the price increase is the Open Interest (OI). Here Open Interest refers to the sum of the value of the contracts open on the market. When OI rises, it means there has been an increase in net positioning. Simply put, an increase in OI implies that traders are adding more liquidity to the market.
However, when the OI falls, traders close their positions and withdraw money from the market. When this happens, the price is at risk of falling.
For Cardano: on-chain data revealed that Open Interest at the time of writing was $613.12 million. This was the highest level of the statistic in more than a month.
Should the value continue to rise, this could serve as a force for ADA’s continued uptrend. If this happens, there is a good chance that Cardano’s native token will rise to $0.45.
Source: Santiment
If Litecoin Moves, Will Cardano Follow?
Furthermore, AMBCrypto’s analysis of Cardano’s correlation with other cryptocurrencies suggested that its price could also continue to rise. Of all the cryptos in the top 20 is Litecoin [LTC] is the one with which ADA shares the strongest correlation.
As an indicator of IntoTheBlock, the correlation matrix ranges from -1 to +1. When the value is close to -1, it means a difference in the prices. However, a position close to +1 implies that prices are mainly moving in the direction of the price the same direction.
Source: IntoTheBlock
Realistic or not, here is ADA’s market cap in LTC terms
That was the case with ADA and LTC. Furthermore, just like Cardano’s price, Litecoin recently reached a weekly high.
At $70.56 at the time of writing, there is a good chance that ADA’s price will follow suit if LTC continues to rise.