Cardano (ADA) is going against the trend of large market cap cryptocurrencies, as its average holders are in profits while other large cryptocurrency holders are still underwater. In particular, Bitcoin, Chainlink, Ethereum, and XRP holders are yet to break even.
What exactly is MVRV?
The average trading returns, or the Market Value to Realized Value (MVRV) of Cardano, is positive, showing that the average ADA holder is in profit. Showing a value of +6.8%, Cardano is slightly overvalued at this point, according to findings from the analytical platform Santiment.
Furthermore, MVRV for Ethereum is at -5.5%, showing that the coin is mildly undervalued. Bitcoin MVRV is at -1.4%, XRP reads -0.1%, and LINK is at +3.3%, all of which are neutral.
The MVRV is a parameter that helps gauge if the current price of the coin is undervalued or overvalued. As such, if the MVRV > 1, it means that the average holder is in profit, and if the MVRV < 1, then the average holder is in loss.
In addition, a very high MVRV (> 3+) signals that the market may be overheated, and a very low MVRV (below 1) signals that the market may be near a bottom.
Whale accumulation puts the MVRV in the positive region
But when the other large market cap coins like Bitcoin and Ethereum holders have not even broken even, how has ADA managed to keep its holders in profits? One possibility is the whale and shark accumulation that has been taking place since the last October 10 accumulation.
When ADA’s price fell by over 71%, from $0.90 to $0.26, wallets with 100K-100M $ADA added +819.4M more ADA ($213.9M), +1.6% of the total supply, creating demand for the token. This catapulted the prices, and the increase in market value lifted the MVRV.
ADA gets stronger but price yet to reflect
Despite the whales accumulating ADA, the price has crashed below the October 2024 level. Currently, the price is below the 50-day Moving Average (MA), which is not a good indication.
However, the Relative Strength Index (RSI) is showing some positive signals. As ADA price is making lower lows, the RSI is making higher lows, showing that the coin is gaining value, but it has not been reflected on the chart yet.
