Hi everyone, I’m back again with another Cardano Video. Today I’m going to give you an update on where Cardano sits in terms of on-chain data, seasonality, correlation to Bitcoin, and also the levels that I’m watching to buy more.
This should help you gauge the health of the network, but also get an idea of what the data is saying about where Cardano currently is. The goal is always to be one step ahead so that we can build a game plan and pull the trigger if the right things align.
Hello, everyone, my name is Jerome I do videos about cryptocurrencies. I currently work for at a french hedge fund, and my mission is to help you build knowledge about the crypto so that you can invest with more confidence and conviction. In this channel, I share things that help you build the right skills and emotional intelligence so that you can learn faster what I took over a decade to learn.
Today’s video will be broken down in three parts: Cardano On Chain Metrics: we are going to look at the chain activity see where it stands Cardano seasonality for February, with correlation with Bitcoin: And finally we’re going to take a look at my risk metrics: what levels I’m watching to buy.
And like always, I know some of you really enjoy them, we’re going to end with a french quote of the day. Alright so let’s jump into part one: Cardano Metrics:
â€¢ When we look at the on-chain metrics of Cardano, what we can see is that the number of wallets has been consistently rising since the launch of the Shelly Mainnet.
â€¢ From around 400k addresses, Cardano now has over 700k existing addresses with non 0 balance.
â€¢ It is still a fraction of Ethereum’s activity, but it growing steadily even without smart contracts being live on the platform.
â€¢ Just to give you some numbers, Ethereum has around 52M addresses with non zero balance and over 1million transactions per day on their chain. I’m very excited about the ERC-20 converter to see if Cardano can take some of this away from Ethereum.
â€¢ In 2020, the number of addresses rose by over 345% and the amount staked to the network rose to close to 70%, from around 25% on the first day of Shelley Magnet in July. That’s nearly over 50% of the circulating ADA joining staking in less than 6 months.
â€¢ In the future and when the market gets excited about PoS chains, I think having such a thin supply on the market, could be a reason for upward price action and outperformance of these types of platforms.
â€¢ The number of pools is staking at around 1400 pools, nearly double what we had in Early august. Even though not of all of them are producing blocks, it is telling that people are joining the ecosystem and trying to strengthen the overall decentralization of Cardano.
â€¢ In a couple of weeks, all the blocks will be produced by the stake pools instead of IOG, and Cardano will become fully decentralized for the first time. It is preparing the ground for Goguen release, and I’m very very excited for Cardano in 2021.
All the efforts that the team has put into building the foundation and this incredible community will finally allow Cardano to take the center stage. Part 2 now, Cardano Seasonality and correlation to bitcoin:
â€¢ Here is a table of the seasonality for Cardano over the last few years. For the month of February, we can see that Cardano fell 39% in 2018, rose 12% in 2019 and fell 11% in 2020. So we can’t really say that there is a particular seasonal pattern, both in terms of side and magnitude of the moves.
â€¢ It will be interesting to follow this data over the years, to see how the seasonality evolves and maybe identify some seasonal patterns.
â€¢ We need more data to be able to prove some form of seasonality exists, so I’ll continue to track it as we move forward.
â€¢ In terms of correlation: the 120days correlation to Bitcoin fell to below 0.40. It used to be closed during the bear market.
â€¢ Remember, correlation is a statistic that measures the degree to which two securities move in relation to each other. When its closer to 1, it means the instruments are moving in tandem, when its -1 it means they are moving in opposite directions.
â€¢ What’s interesting to note is that Cardano currently has a higher correlation to Ethereum than Bitcoin.
â€¢ The Cardano Ethereum correlation currently stands at around 0.7. Because it’s very close to 1, it means than Cardano and Ethereum are almost moving in tandem.
â€¢ So when people are telling you that Cardano is following Bitcoin, its actually following ETHEREUM more closely because its correlation is higher.
â€¢ The important thing to note here, is that Cardano’s correlation to bitcoin is getting lower and lower.
â€¢ What it means in simple terms is that Cardano is starting to do its own things. You probably have noticed that ADA has been outperforming Bitcoin recently, and when bitcoin was falling, I didn’t fall more than Bitcoin, like it used to do.
â€¢ The right financial term that you will hear people use is that Cardano is “DECOUPLING” from Bitcoin.
And this exactly what we want to see for our favourite project.
â€¢ On a side note, the ADA to BTC ratio has upticked, you can see that from our last update it was in the cheap zone and now, it’s slowly starting to move higher. So as of now, our decision shared in the telegram group to convert ADA into BTC in early January actually performed very well with almost 100% outperformance. Risk 3: Risk metrics and levels I’m watching
â€¢ For Cardano, using my risk model, I have identified Medium Risk entries and Low-risk entry zones. Remember that my model is looking at past price behaviour, and tries to identify which regions had similar price action and range in the past.
â€¢ The levels that I’m watching for entries are 0.286 for medium risk, and 0.1820 for Cheap entries.
â€¢ What it means is that if we get to the medium zone I would buy, but with a moderate pace, and if we get into the cheap zone of 0.18, I would probably be buying more aggressively.
â€¢ Right now, I’m being very patient because I already own a good amount of Cardano. I’ve told myself I would not sell any ADA before a couple of dollars at least.
â€¢ Your situation might be very different, and I do not recommend following the same plan that I have. Use the data that I’m giving you and try to see if it does make sense for you. For me, if it were to never fall back to those entry prices, I would still be doing very well.
â€¢ Timing the market is very very risky and as we’ve seen in other videos, you don’t be to left on the sideline when the real run happens. Remember than in crypto, the performance is usually concentrated in short periods of time. You don’t want to be left behind with no exposure, so your best bet I to increase gradually your exposure, and holding until you reach your target.
â€¢ Trading in and out will stress you out, and do more harm than good to your mind.
â€¢ The reason you don’t want to be stressed out by the market is that you need your clarity of mind to be productive and live a normal life.
If you want to support the channel, please consider staking you cardano with my stake pool, or join the telegram channel.
The links will be in the description down below. Let’s end off with the french quote of the day from Victor Hugo: “La libertÃ© commence oÃ¹ l’ignorance finite.” Liberty starts where ignorance ends.
So be open-minded, and as long as you learn a little each day you will affirm your liberty. Alright, I hope you learned something today, thank you for the support That was Jerome And until next time, BBYE.
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