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Cardano Could Be Extremely Undervalued, According to Santiment

Wed, 12/28/2022 - 08:25
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Arman Shirinyan
State of cryptocurrency in 2022 was depressing, but indicator shows possible recovery in next year
Cardano Could Be Extremely Undervalued, According to Santiment
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Cardano remains in a complicated state on the cryptocurrency market. The asset could not find any support from institutional investors in 2021 and has not gained any redemption in 2023. Two years of active selling made Cardano extremely undervalued compared to Ethereum, Solana and other competitors. But does it necessarily mean that ADA will rally in 2023?

Santiment's view

According to the analytical platform's insights blog post, there are some signs that sellers are becoming exhausted. On every downward movement in ADA, there are fewer coins at a loss on the network, which shows continuously decreasing selling power on the network.

Additionally, we are seeing a downtrend in a trading volume — one of the strongest fading/reversal signals observed on the market. As a trend goes by, bulls or bears gradually lose their power, slowly giving the momentum away; at that point, a trend reversal happens. This could be the case for Cardano in 2023, especially if we see a general recovery of the cryptocurrency market.

However, the whole analysis was based on only a few indicators that do not give us any fundamental insight that would also allow us to confidently forecast the movement of ADA in 2023.

How things turn out now

Unfortunately, Cardano does not look like it is ready for a bounce as it has dropped to the local low once again, failing to gain momentum after showing a 7% price increase in the last four days.

XRP, DOGE, ADA: Top 10 Cryptos by Market Cap Undergo Significant Changes

The trading volume on the asset is indeed descending, but this does not necessarily tell us about the trend fading as it could also be the result of holidays on financial markets across the world. The tendency will most likely prevail up until Jan. 5.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.