Cardano’s $1 billion in futures open interest reveals that ADA is a strong candidate.

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Cardano’s Coinbase listing assisted in pushing open interest on its futures contracts above $1 billion, suggesting that investors are worried about ADA.

Cardano (ADA) has had a good start to the year, smashing through the psychological $1 mark and hitting an all-time high of $1.50. The network’s remarkable 590 percent year-to-date gain occurred as it turned into a multi-asset network, close to Ethereum, and this could bode well for Cardano’s future.

 

Cardano price at Binance, USDT. Source: TradingView

The final leg of the rally seems to be linked to the Coinbase Pro listing, which was revealed on March 16, and resulting in a revived push to $1.47 on March 18.

As the price of Cardano grew, so did its spot trading rate and on-chain transactions, which exceeded Litecoin (LTC). Cardano’s futures contracts open interest grew fivefold in 2021 as a result of the increased market interest.

 

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Cardano futures aggregate open interest. Source: Bybt

Make no mistake: only Bitcoin (BTC) and Ether (ETH) have broken the $1 billion open interest mark. Furthermore, just three months earlier, Ether had a $2 billion available stake.

To better understand if Cardano truly needs to be ranked third in terms of market capitalisation, one should equate its spot volume and on-chain metrics to those of other altcoins.

ADA trading volume and on-chain metrics strengthen

Low trading volume, regardless of market volatility, indicates a limited customer base or a shortage of new entrants. As a result, Cardano’s volume should be in the top 5.

Top 10 crypto year-to-date trading volume, USD. Source: Nomics

ADA had a $97.5 billion trading rate in 2021, surpassing Polkadot (DOT), Ripple (XRP), and Litecoin, according to Nomics straightforward market volume.

While this is encouraging, it is also worth investigating on-chain metrics to see whether futures open interest and spot volume represent this network operation.

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The number of active addresses on a regular basis gives a more accurate image of network use. However, this information cannot be relied on blindly. The higher the fees, the less the incentives to inflate the figure.

 

Daily active addresses, 14-day average. Source: CoinMetrics

Cardano seems to be decoupling from other altcoins, with 85,000 regular active emails. Furthermore, there seems to be no evidence of fake figures since the growth direction appears organic and in line with volume operation.

To determine when such addresses have been involved, examine transfers and transactions, as well as the overall amount of value effectively circulated on each network.

 

Transfers and transactions (USD) 14-day average. Source: CoinMetrics

This moment, Cardano’s power is on full display, with the network’s regular transfers and purchases averaging $4.5 billion a day. This amount is at least six times that of the remaining competitors. As a result, ADA’s on-chain operation helps to sustain the $45 billion market capitalisation.

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Volumes and on-chain data are critical indicators, but Cardano may have a small window of opportunity to capitalise on problems created by Ethereum network congestion. Until real usage cases involving decentralised software or interconnectivity bridges that function to solve the decentralised finance scaling dilemma, the ADA price may fall.

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