Altcoins
Cardano AT THE TOP of this altcoin leaderboard – Good news for ADA holders?
- Cardano has the highest Nakamoto coefficient among all chains, indicating higher levels of decentralization.
- Sentiment around ADA, however, was not affected by the price drop.
Over the past few months, there have been many areas where Cardano[ADA] has not been able to compete with other layer 1s. However, there is one area where Cardano’s dominance is unprecedented.
Will decentralization bring users to the construction site?
According to recent findings, Cardano now has a higher Nakamoto coefficient than other altcoins on the market – a sign of strong decentralization. The Nakamoto coefficient is a metric used to estimate the number of entities needed to control 51% of a blockchain’s hashrate. A higher Nakamoto coefficient indicates a more decentralized network.
This means that the Cardano network cannot be influenced by a few large entities that dominate most of the network. A high Nakamoto coefficient can improve the sentiment of crypto enthusiasts and attract more users to the network.
Source: EDI
However, the Nakamoto coefficient was not sufficient to obtain addresses for purchasing ADA. Over the past week, for example, the price of ADA has fallen by 3.82%. At the time of writing, it was trading at $0.4503. The crypto’s trading volumes also fell by over 3.82% during the same period.
Even though ADA addresses hold the tokens of one of the most decentralized networks, most of them remain unprofitable. This was revealed by AMBCrypto’s analysis of Santiment data, which indicated a negative MVRV ratio for the network. Additionally, the data also showed that the Long/Short difference has decreased – a sign that the number of long-term ADA holders has decreased.
The prevalence of short-term holders could negatively impact ADA, as these holders are much more likely to sell their holdings amid market volatility.
Source: Santiment
How are the traders doing?
The bulls have paid the price for this drop in prices in recent days. In fact, Coinglass data revealed that the number of long positions liquidated increased significantly over the past week. In the last 24 hours alone, long liquidations for ADA totaled $99,870.
Source: Coinglass
Due to these factors, sentiment around ADA has become skeptical. Most traders have turned bearish over the past few days, which was reflected in the increase in the percentage of short positions against ADA.
Since May 1, the percentage of short positions against ADA has increased from 49% to 53.8%.
Realistic or not, here it is Market capitalization of ADA in terms of BTC
Source: coinglass