Recent activity in the cryptocurrency market has shown that while Bitcoin is experiencing significant gains, many altcoin projects are facing serious declines. Cardano's current price trend is in a downward trajectory, but analyzing specific data suggests that there may be hope for a recovery soon. If this recovery takes place, Cardano (ADA) could be on the verge of a notable rally.

Important Data for Cardano

Cardano recently saw a 15% decrease in value, currently trading around $0.570, close to a support level that has been repeatedly tested. Despite the indications of a continued downtrend, on-chain data provides a more positive outlook.

One key metric to consider is the Market Value to Realized Value (MVRV) ratio, which is crucial for analyzing investor profitability. With ADA's 30-day MVRV standing at -12.5%, signaling current losses, this situation often leads to increased buying interest. Historically, ADA tends to see a rebound when MVRV ranges between -8% to -18%, considered an advantageous zone for investors.

Additionally, when the percentage of profitable ADA supply drops below 65%, the price typically starts an upward trend. Currently, only around 60% of ADA's total supply is in a profitable state, aligning with past recovery trends spanning over three years.

ADA Technical Analysis

At its current value of $0.57, ADA is at a crucial juncture, aiming to stay above the support level. Under these circumstances, a rise to $0.63 seems plausible, a level previously a significant resistance point. A breakthrough at this level could trigger a rally towards $0.70 or higher.

However, if ADA drops below the $0.56 support level before a recovery materializes, it could dampen the bullish sentiment and potentially push the cryptocurrency towards the next major support at $0.50. Despite recent gains, the altcoin sector has witnessed a decline following Bitcoin's downturn, with many projects failing to see an upsurge.