Cardano’s ‘Swelling’ Wallets Should Make ADA Investors Stare – Here’s Why

  • Cardano recorded a 55% increase in wallets as more investors continued to choose decentralized projects
  • Long- and short-term ADA positions remain in similar situations with significant declines

According to data from Cardano blockchain insights, there are wallets on Cardano [ADA] the network had increased by nearly four million. This milestone meant that the Proof-of-Stake (PoS) blockchain had been able to register more than 55% growth in the past year.

At the time of writing, wallets on the ADA network were 3,753,590. This number undoubtedly showed that Cardano had registered massive growth despite the volatile market conditions.

According to the ADA ecosystem tracker, over 100,000 wallets have been added to the blockchain since the beginning of November.

Source: Cardano Blockchain Insights

Read Cardano’s price estimate for 2023-2024

This sublime increase in wallets may not be connected to the fall of FTX, especially as investors vowed to move to decentralized exchanges. Since Cardano’s network was primarily decentralized, it was likely that the increase meant a “vote of confidence” in the project.

Long-term HODLing justifies nothing yet

Despite the hike, the ADA’s long-term holders were still on board severe pain. This was because the market value to realized value (MVRV) ratio indicated massive loss for these ADA supporters. According to Santiment, the 365-day MVRV ratio was -52.14%.

Although the 30-day state was no better, it suggested that investors with ADA in their wallets far from doubled the value of their holdings.

In fact, the drop in value reflected a further turn to the downside rather than a significant respite. In terms of z-score, the ADA was at -1.238 points. It indicated that ADA was undervalued in its current location and the current value could offer a moment for investors to accumulate.

However, this gave no guarantee that ADA would not fall further, even though it was 89.78% down from its all-time high.

Cardano MVRV ratio and MVRV z-score

Source: Sentiment

Do wallets lend a hand?

Cardano also recorded an increase in transaction participation as the number of wallets increased. Based on Santiment revelations, the 24-hour ADA active addresses had increased to 72,400. The seven-day count also showed an increase to 347,000. This suggested that wallets created were not just being registered for dormancy. Instead, they had been actively involved in contributing to deposits on the Cardano network.

However, the circumstances contrasted with the state of the ADA circulation. At press time, one-day ADA circulation had fallen from 287.56 million to 112.48 million.

With a decrease of over 100%, it suggested that the number of unique ADA tokens which exchanged hands during the period was not significant. Therefore, short-term traders barely traded the token. Nevertheless, that did not mean a decline in interest.

Cardano circulation and active addresses

Source: Sentiment

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