Cardano (ADA/USD) is seriously undervalued. This is based on data from crypto analytics Santiment. ADA traded at a low of $0.36 after a bearish market over the past week.
Using Cardano’s MVRV Z-Score, Santiment data highlights ADA’s low valuation . Therefore, the token trades at the lowest level of its realized value. Since early 2019. A low Z-value indicates that the asset is undervalued. Is the undervaluation a sign of a rebound in the ADA market?
Sentiment implies that ADA has doubled in value in just 3 months, and its The MVRV Z-Score last reached low levels. This was the case when the analytics firm also reported an increase in capitulation across the cryptocurrency market. A capitulation is characterized by a trader closing a position at a loss. This happened before the market rebounded.
The latest data will come even though Cardano is still under pressure. However, the coin has recovered some losses, gaining 4.80% intraday on Monday. The gains came just 24 hours after FTX CEO Sam Bankman-Fried assured members of the exchange’s spot ADA. ADA is the only token in the top 25 exchanges that does not have a spot listing.
AADA is approaching the 23.6% retracement after the latest recovery
Source – TradingView
From a technical perspective, ADA starts Bouncing back above the $0.32 area. Looking at the Fibonacci retracement levels, the cryptocurrency has a swing high of $0.5109 and a swing low of $0.3296. Possible retracements are $0.37 (23.6%), $0.3988 (38.2%), $0.42 (50%), $0.44 (61.8%).
The key retracement levels are likely at the Fibonacci levels shown above.
Should you buy ADA?
While a recovery to $0.32 bodes well for ADA, we have yet to confirm bullish momentum. The cryptocurrency remains below a key support and resistance level at $0.42. This level coincides with the 50% or 61.8% retracement.
Again, the cryptocurrency market outlook is still less convincing. Therefore, we may stay in a bear market for a longer period of time. Most cryptocurrencies
Nonetheless, ADA remains attractive to investors looking for cryptocurrencies with underlying fundamental value force. Potentially, the return of the bull market will usher in a long-lasting rally in the sluggish ADA.
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