ALTCOINS Can Cardano crack the top three in the next months?

Cardano, one of the most popular altcoins on the market, has made a strong comeback in the last week. On the 20th of July, the alt was trading at a one-month low ($1.05), but it soared by more than 16 percent in the following week. At the time of writing, ADA was worth $1.38.

Cardano's short-term return on investment appears to be quite good at this point. Market participants are now staking their ADA HODLings to improve their earnings even further. Staking Rewards data shows that close to 35.51 percent of the total ADA supply is presently staked. The explicit worth of the same is a little more than $14.8 billion.

Staking rewards for Cardano have increased dramatically since July 21. To put it another way, staking Cardano earns investors a 12.82 percent annualised reward rate. When corrected for network supply inflation, the figure drops to 8.4 percent, which is still a respectable percentage.

The increase in incentives obtained simply means that new investors now have the necessary incentive to enter the ADA arena. The rise in ADA's real volume reflected the same trend. On the 10th of July, the aforementioned metric had a value of $274 million, but by the 27th of July, it had risen to $687 million.

It should be highlighted at this stage that staking alone will not be able to raise the alt's price. It's crucial to look at many additional on-chain data to get a better understanding of the state of the alt.

At the time of writing, Cardano's sharpe ratio was trending northward. At press time, it was at its one-month high (1.53). This statistic clearly shows an asset's prospective risk-adjusted returns. A sharpe ratio of more than one is deemed ‘acceptable' to ‘good' as a rule of thumb. As a result, the higher the Sharpe ratio, the better the returns. To be more specific, ADA holders are currently being reimbursed more than usual for the risk they have taken.

Despite the fact that the sharpe ratio is now positive, the alt's adjusted NVT does not appear to be enticing. This metric usually depicts the link between market capitalization and transfer volume. On July 11th, Cardano's adjusted NVT ratio was as high as 56.7. However, at the time of writing, the same was only at 12.17.

The present low ratio suggested that the network value could not keep up with the network's rising usage. This effectively signifies a halt in ADA's growth stage, which causes a bearish reaction.

Furthermore, ADA's market capitalization domination has been declining from its recent high of 3.32 percent. This indicates that Cardano's value is declining in relation to the bigger crypto market. The same had a value of 2.5 percent at the time of writing.

Despite the decline in ADA's dominance, it's worth noting that the present level is still greater than it was in the final months of 2020. The graphic linked demonstrates this point.

Furthermore, Amy Arnott, a Morningstar portfolio manager, has stated that ADA might join BTC and ETH as one of the “big three” popular cryptos. She went on to say about the "promising altcoin," "

“Cardano is similar to Ethereum in the sense that it is a protocol with a wide range of technological applications. Cardano, as well as different stablecoins, are generating a lot of interest.”


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