- Cardano and Solana decoupled from the Bitcoin, Ethereum, and crypto ecosystems, posting double-digit overnight profits on January 8th.
- On-chain indicators such as social dominance and daily active addresses show both bullish trend reversals.
- Litecoin’s correlation with Bitcoin and Ethereum has dropped, and altcoins may be preparing for an explosive price rally.
Cardano and Solana, two competitors of the smart contract blockchain network Ethereum, have recently witnessed a significant price increase. On-chain indicators such as social dominance and network activity of ADA and SOL showed a bullish trend reversal before the token recorded double-digit price gains. Altcoin is Litecoin, and bulls are targeting a 22% rise in payment tokens.
Learn more about the three key developments the Cardano community is looking forward to in 2023 here.
Also Read: Solana Network Witnesses Daily Activity Surge, Rebounds to 3x Pre-FTX Collapse
Cardano and Solana Prices Give Holders Over 20% Profit in 24 Hours
Cardano, the Ethereum killer smart contract blockchain network, and Solana, the proof-of-stake Layer 1 blockchain, will offer holders a 20% return in 24 hours from January 8 to January 9, 2023. brought Market cap cryptocurrencies Bitcoin and Ethereum plummeted while altcoins split and witnessed a bullish breakout.
The correlation matrix below shows the correlation coefficients of assets with BTC and ETH.
Correlation matrix from cryptowat.ch
As can be seen in the table above, Bitcoin and Ethereum are strongly correlated, while altcoins such as Litecoin, XRP, Cardano, and Solana are decoupled or less correlated. The correlation between Litecoin and Bitcoin plummeted to 0.63.
3 On-Chain Metrics Showing Bullish Breakouts for Cardano and Solana
Based on data from cryptocurrency aggregator Santiment, on-chain metrics such as social dominance, network activity, and profit-loss ratio of daily on-chain transaction volume show trend reversals for Cardano and Solana. .
The daily active addresses in the cryptocurrency network reflect the amount of activity on the blockchain. The steady increase in daily active addresses indicates an upcoming trend reversal. A surge in daily active addresses and high network activity is synonymous with an upcoming bullish breakout for the asset, just as an increase in whale activity and block trades signals a surge in selling pressure and a bearish trend reversal. .
Asset Social Dominance is a metric that uses big data collected from social media forums where the asset is mentioned. Social dominance skyrockets when frequently mentioned on social media.
Another metric used by analysts is the profit-to-loss ratio of daily on-chain trading volume. Track the total amount of coins or tokens across all transactions on the network that have moved in a given interval. If the volume of transactions that caused losses compared to profits is small, the ratio will increase and vice versa for profits. The chart below shows that the Cardano price has risen and the profit-to-loss ratio of daily on-chain trading volume has steadily increased.
The graph also shows a concurrent rise in the number of daily active addresses on the network.
Cardano on-chain metrics
During the last week of December, the number of daily active addresses (dark green bar) on the network steadily increased along with price. This is also coupled with rising social control (blue line) and a steady rate of profit-realizing trades (light green bar), and Cardano’s price reaching a monthly high of $0.3395.
Solana flipped the narrative from a dead project and made 22% profit per day
The collapse of Samuel Bankman-Fried’s FTX exchange and the shift of NFT projects and dApps from the Solana blockchain to Polygon and Ethereum have fueled bearish talk among SOL holders. The Ethereum killer altcoin has wiped out the rally from 2022, with its price plummeting in November 2022.
Solana has turned the narrative upside down, recovering from a “dead project” to a proof-of-stake blockchain with high development activity and consistent social dominance and volume. After decoupling, we observed a surge in trading volume.
Solana on-chain metrics for Santiment
As seen in the chart above, Solana’s price has risen on the back of increased trading volume, popularity among traders on social media platforms, and social dominance peaking in late December 2022. I’m here.
Litecoin may follow Cardano and Solana as its correlation with BTC and ETH declines.
Litecoin Price Gears Up for 22% Rise
Litecoin, a payment token and Bitcoin alternative, is on track for a bullish breakout from the rising channel. The recent breakout of his 50-day exponential moving average (EMA) above his 200-day EMA confirms a bullish golden cross signal.
A break above the upper trendline could push LTC to key resistance at $85.03 and a bullish target at $101.50. As seen in the chart below, Litecoin could witness a 22% gain after the bullish thesis is validated.
Litecoin’s bullish breakouts may be temporary and represent an increased likelihood of a crash or attrition before a reversal, so traders should approach it with caution.
LTCUSDT perpetual contract
However, the relative strength index (RSI), a momentum indicator, is at 78.70, indicating that Litecoin is overbought. This is a signal and a potential warning flag for the bulls not to add any more longs. A drop below the 70 level signals holders to sell long and short.
This could invalidate Litecoin’s bullish thesis if the price breaks below the channel’s lower trendline or the two exponential moving averages at $74.91 and $71.90.