- ADA Performance Fueled by Rising Net Positioning and Another Notable Change
- Altcoin has a strong correlation with LTC, indicating that its price may continue to rise
Cardano’s [ADA] price increased by 20.75% in the last seven days, reaching a weekly peak of $0.42. The price increase made the token, which at one point was one of the worst performers in the market, the biggest gainer in the top 10.
However, ADA didn’t just rise to the top without any solid foundation. According to AMBCrypto’s on-chain analysis, the Mean Coin Age was one of the reasons why the price shot up.
Often referred to by its short form, the MCA measures the average age of all tokens on the blockchain. When the coin age increases, it means that holders of a cryptocurrency 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 the coin age decreases, it means that holders choose to keep their coins off the exchanges.
In our analysis using Santiment’s data, we saw that the 90-day MCA dropped to 34.71. This indicated that Cardano holders have been moving their assets into non-custodial wallets.
Source: Santiment
If this continues, there is a good chance that ADA’s price will move closer to $0.45.
Another indicator responsible for the price increase is the Open Interest (OI). Open Interest here refers to the sum of the value of contracts that are open in the market. When the OI increases, it means that there has been an increase in the net positioning. Simply put, an increase in the OI implies that traders are adding more liquidity to the market.
However, when OI falls, traders close 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 stood at $613.12 million at the time of publication, marking the highest level of the metric in over a month.
Should the value continue to rise, it could serve as a force for ADA’s continued uptrend. If this happens, there is a high chance that Cardano’s native token will climb 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 continue to rise as well. Of all the cryptos in the top 20, Litecoin is [LTC] is the one with which ADA has the strongest correlation.
As an indicator of IntoTheBlock, the Correlation Matrix ranges from -1 to +1. When the reading is close to -1, it indicates a divergence in prices. However, a reading close to +1 implies that prices are largely moving in the same direction.
Source: IntoTheBlock
Realistic or not, this is ADA’s market cap in LTC terms
That was the case with ADA and LTC. Moreover, Litecoin, like Cardano’s price, also 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.