- Bitcoin halving may cause a short-term ADA price decline before a potential new bull run.
- Current on-chain and social metrics mimicking late 2019.
- The long-term outlook is still bullish for ADA, with development ongoing.
With the next Bitcoin halving anticipated in April 2024, historical data suggests that the significant crypto event could lead Cardano’s ADA token to fall further in price for a few months before potentially embarking on another bull run. According to analysis, ADA’s price bottomed out around two months before the previous Bitcoin halving in 2020 before surging dramatically in value soon after the event. If Cardano follows a similar pattern, its price could continue decreasing over the coming weeks before reaching a bottom and rebounding in early 2024.
We're currently in the phase between the bear market rally and the BTC halving. This is typically where many cryptocurrencies, including #Cardano, find their bottom.
In fact, $ADA found its bottom 2 months before the last halving. The next halving is scheduled for April 2024. pic.twitter.com/nosqzsFkTz
— Eilert (@Eilert) September 9, 2023
Currently, ADA has declined over 4% in the last week alone. However, looking at on-chain and social metrics from late 2019, when Cardano was approaching the last halving event, whale activity, social volume, and other vital indicators mirror similar levels today, as shown in the chart below. This, per experts, implies that ADA could be set to repeat its pre-halving price action.
According to the chart, Cardano’s 30-day Market Value to Realized Value ratio, which compares its market cap to realized cap, now ranges between -16 and 5, like in late 2019. Additionally, open interest has fallen with ADA’s recent price drop, suggesting the current downtrend may soon reverse.
While Cardano sinking lower ahead of the 2024 halving seems probable based on historical trends, nothing is guaranteed. The cryptocurrency market remains highly volatile and is also impacted by various external factors.
Still, if ADA, currently trading at $0.2477, does bottom out within the next few months and rises rapidly in early 2024 as it did during the previous halving, patient holders could be rewarded handsomely. Of course, Bitcoin’s price action would also determine whether an “altseason” ensues after its next halving. Currently priced above $25,000, Bitcoin could lift Cardano and other altcoins if it maintains strength leading into its halving, as shown in the chart below.
While short-term price drops for ADA seem likely, the long-term outlook remains positive, especially considering Cardano’s ongoing development and network growth. However, traders and investors should closely monitor on-chain signals, social metrics, and technical indicators to determine when ADA would bottom and potentially reverse higher.
