A Cardano price signal that preceded a roughly 300% rally in 2023 has resurfaced — but traders should still be cautious.
Santiment’s data shows Cardano’s 365-day Market Value to Realized Value (MVRV) ratio has plunged to -43%. In plain terms, wallets that have been active on Cardano over the past year are sitting on an average unrealized loss of 43%. Santiment classifies this range as the “opportunity zone,” a level that in 2023 and late 2024 preceded recoveries as the MVRV mean-reverted back toward zero.
MVRV compares current market value to the average price paid by holders across a set timeframe. When it’s deeply negative, it often means the most loss-averse holders have already sold, leaving supply in the hands of investors who are either committed to holding or have already written off losses. That reduces immediate selling pressure and can set the stage for a rebound if a catalyst arrives.
At the same time, derivatives markets are heavily tilted toward bears. Binance’s weekly average funding rate for ADA has turned as negative as it has been since June 2023. Funding rates balance longs and shorts in perpetual futures; a deeply negative rate indicates shorts dominate and are effectively paying longs to keep positions open. That crowding on the short side is a classic contrarian setup — concentrated shorts are vulnerable to short squeezes, where a modest price uptick forces short sellers to buy back, amplifying upward momentum through cascading liquidations.
These two signals lined up most recently in mid-2023, when ADA traded near $0.25 before climbing roughly 300% over the subsequent 18 months. Still, that historical parallel is not a guarantee of a repeat. Cardano is down about 71% from its September peak, the macro backdrop remains challenging (geopolitical tensions, sticky inflation, and rates not yet easing), and Cardano’s on-chain usage hasn’t shown the growth necessary to justify a fundamental re-rating.
Ultimately, bottom signals speak to positioning more than fundamentals. Right now, with average holders about 43% underwater and shorts near a three-year high, the market is set up in a way that could catch many traders off guard on the next meaningful move — up or down.
Price check: ADA was trading around $0.26 on Tuesday, down roughly 7% on the week.
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