On-chain analysis is a fundamentals driven approach rather than based on hype, sentiment or .
We compare the value of the network with the of transactions recorded on the blockchain, we can identify when a cryptocurrency is overvalued. When the value of the network is not justified by the of transactions, the NVT ratio is relatively high. The NVT ratio is often compared with the for equities.
During the peak of the 2017/18 bull market, Cardano’s NVT was around 24. During the following bear market it peaked at 100.
Bitcoin , on the other hand, valued 40 during the market peak and climbed to 70 afterwards. BTC has been remaining quite constant around this level.
Contrarily, ADA fell back to a level of only 10, making it fundamentally undervalued compared to the bull market, the bear market and in comparison to Bitcoin .
This is in line with other metrics, e.g. the number of total addresses during the first peak in 2017/18 was only 120k while it is now approaching 2000k. The price during the first peak was $1.20, the same level as we have currently, again pointing towards undervaluation.
Time is on our side and I expect the bull market to get into its next phase, let it be end 2021, or mid 2022.
Then ADA is expected to profit strongly and eventually outperform Bitcoin .