Altcoin
Cardano is at the top of the altcoin ranking: good news for ADA holders?
- Cardano has the highest Nakamoto coefficient among all chains, indicating higher levels of decentralization
- However, sentiment towards ADA remained unchanged as prices fell
Over the past few months there have been many areas where Cardan[ADA] it has not been able to compete with other Layer 1s. However, there is one area where Cardano’s dominance is unmatched.
Will decentralization bring users to the pipeline?
According to recent findings, Cardano now has a higher Nakamoto coefficient than other altcoins in the market – a sign of high 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 the majority of the network. A high Nakamoto coefficient can improve sentiment among cryptocurrency enthusiasts and attract more users to the network.
Source: EDI
However, the Nakamoto coefficient was not sufficient to obtain addresses to purchase 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 cryptocurrency’s trading volumes also decreased by more than 3.82% during the same period.
Even though ADA addresses hold 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. Furthermore, the data also showed that the Long/Short difference is decreasing, a sign that the number of long-term ADA holders is decreasing.
The prevalence of short-term holders could have a negative impact on ADA as these holders are much more inclined to sell their holdings in an environment of market volatility.
Source: Santimento
How are traders doing?
Bulls have borne the brunt of this price decline in recent days. In fact, data from Coinglass revealed that the number of liquidated longs has grown significantly over the past week. In the last 24 hours alone, long settlements for ADA totaled $99,870.
Source: Coinglass
Because of these factors, sentiment toward ADA has become skeptical. Most traders have turned bearish in recent days, which has been reflected in the growth in the percentage of short positions against ADA.
Since May 1, the percentage of short positions in ADA has grown from 49% to 53.8%.
Realistic or not, that’s it ADA’s market capitalization in terms of BTC
Source: coinglass