Cardano’s ($ADA) transaction volume in USD has been on a downtrend since March.

Data from Santiment shows that Cardano’s daily transaction volume has consistently made lower highs, consolidating a downward pattern. In the last 24 hours, Cardano transacted $1.53 billion, a stark contrast to the over $11.56 billion confirmed during March’s peak, representing a tenfold decrease.

As of now, ADA is trading at $0.40, down 48% from the $0.77 exchange rate in March. While this price drop is significant, it is notably lower than the decline in network activity, underscoring the relevance of this on-chain downtrend for Cardano.

Despite this, Cardano’s Network Value-to-Transaction (NVT) ratio on July 30 was 9.16, which is relatively low in the crypto space. The NVT ratio, which divides a cryptocurrency’s market cap by its network’s transaction volume or circulating tokens, serves as a benchmark for valuation. A higher NVT ratio suggests that an asset might be overvalued.

$ADA: Cardano's Transaction Volume (USD) is on a downtrend.

Since March, Cardano’s daily transaction volume has made lower highs, consolidating a downtrend.

Data from @santimentfeed shows $1.53 billion transacted on Cardano in the last 24 hours. Comparatively, the network… pic.twitter.com/NixLFnzJCV

— Vini Barbosa (@vinibarbosabr) July 30, 2024

For comparison, Bitcoin (BTC) and Ethereum (ETH) currently have NVT ratios of 251 and 166, respectively. These ratios are 27 and 18 times higher than Cardano’s, indicating that, despite the recent drop, Cardano’s market cap is more balanced with its transaction volume than the two leading cryptocurrencies.

This decline in transaction volume and the resulting on-chain downtrend highlight a period of reduced activity on the Cardano network. However, the relatively low NVT ratio suggests that Cardano remains undervalued compared to Bitcoin and Ethereum, indicating a more balanced market cap relative to its transaction volume.

As Cardano navigates these challenges, investors and users will be closely watching to see if the network can rebound and regain its transaction volume, ensuring its continued relevance and growth in the competitive crypto market.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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Image Source: ximagination/123RF / Image Effects by Colorcinch

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