Crypto analyst Ali Martinez has pointed to ADA’s historical market cycles to suggest a potential rally. Martinez compares the current correction to ADA's 2020 market movement. During that period, ADA retraced from $0.190 to $0.12 before surging 750% to $1.02 by early 2021. Based on this precedent, Martinez believes a similar rally could occur after the current correction, though it may take time for the market to recover.
While historical patterns offer hope, ADA’s current market fundamentals remain weak. On-chain activities have dropped significantly, with large transactions hitting a monthly low. Cardano’s Price DAA divergence has been negative for over a week, signaling a disconnect between market valuation and on-chain growth.
Additionally, the Network Value to Transactions (NVT) ratio has spiked from 9.17 to 38.12, indicating that speculation rather than active usage is driving ADA’s valuation.
With these challenges, ADA’s corrective phase may not yet be over. Analysts predict a possible drop to $0.85 before a trend reversal. For a sustained recovery, ADA needs increased on-chain activity, such as higher active addresses and transaction volume. Breaking key resistance levels at $1.2, $1.6, $1.8, and $2.4 will be crucial for a long-term rally to $6.