Cardano NVT Ratio Reaches Highest Level Since June
On-chain data indicates that Cardano's Network Value to Transactions (NVT) Ratio has recently increased, which may have implications for ADA's price.
Cardano NVT Ratio Has Surged To Its Highest Level Since June
A recent post by IntoTheBlock highlights the upward trend in Cardano's NVT Ratio. The NVT Ratio measures the relationship between the ADA market cap and transaction volume.
A high NVT Ratio indicates a high network value relative to transaction capability, suggesting potential overvaluation of the coin's price. Conversely, a low ratio may indicate undervaluation and potential for price recovery.
The following chart illustrates the trend in the Cardano NVT Ratio over recent months:
The graph shows a significant increase in the Cardano NVT Ratio, despite a general bearish price trend for the coin. This suggests a decline in transaction volume on the network.
This recent surge marks the highest NVT Ratio since June, indicating that the cryptocurrency is at its most overvalued level in six months. The trend appears linked to Cardano’s stagnant price movement compared to other cryptocurrencies like Bitcoin, which have seen upward momentum. Consequently, some ADA investors may be exploring other options.
According to the analytics firm, “Historically, elevated NVT ratios often precede price pullbacks.” Thus, the recent spike could signal further challenges for the coin.
The Cardano NVT Ratio will be important to monitor in the coming days. Additional increases may confirm a bearish outlook, though there remains a chance for a trend reversal if network activity increases sufficiently to support its current market cap.
ADA Price
The cryptocurrency market has experienced an overall rise recently, with Cardano also showing gains. While its increase has been smaller than Bitcoin's, ADA has risen above the $0.348 mark. The following chart depicts the recent price trajectory of the coin.
