Crypto exchange Kraken says that the current price movement of Cardano (ADA) relative to its daily transaction could be a bullish indicator for the sixth-largest cryptocurrency by market cap.
In a new report, Kraken says that, while ADA’s price is strongly correlated with the volume of network activities, this has not been the case since late 2021 when Cardano’s price failed to keep up with the increase in its daily transactions.
“Throughout the course of 2020 and 2021, per figure 13, there was a strong correlation between ADA price movement and daily transactions. This relationship sustained until November 2021 when we saw the price of ADA trickle off while daily transactions saw a slight uptick.”
Kraken says that a “buy the hype, sell the news” pattern characterizes the market activities leading to Cardano’s upgrades, but the current relationship between ADA’s price and transaction volume suggests dwindling hype over the network.
The exchange says that ADA is undergoing a correction phase and is still on track for growth as decentralized apps (DApps) launch on the network.
“This could be a bullish indicator for ADA that the asset is in a correction cycle due to a drop in hype rather than exodus of the network. This is important to consider particularly as the long-anticipated launch of DApps on the network begins to roll out.”
At time of writing, ADA is trading at $1.05.
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