On Feb. 3, Cardano conducted a hard fork and successfully integrated the Mary upgrade to the testnet, transforming the blockchain into a multiasset network similar to Ethereum.
This event seems to be one of the reasons for the impressive 475% year-to-date rally of ADA, and the altcoin is now causing unexpected ripples in the derivatives markets.
Since the end of December 2020, ADA’s $81-million aggregate futures open interest hiked to the current $580 million, becoming the third-largest derivatives market, behind Bitcoin (BTC) and Ether (ETH).
Data indicates this was not purely a technical adjustment, as Cardano’s on-chain and trading metrics vastly outperform Litecoin’s (LTC).
ADA futures aggregate open interest. Source: Bybt
A week ago, Litecoin led ADA’s open interest by a 50% or higher margin. That all changed over the past five days, as Litecoin’s aggregate futures position was cut by 40%.
Despite facing a similar price correction to Litecoin’s 30% one between Feb. 20 and 22, ADA had $125-million long contracts liquidations, roughly 19% of the open interest at that time.
ADA trading volume and on-chain metrics strengthen
Volume is the first and foremost indicator of investors’ interest. Regardless of the price movement, low trading activity reflects a small user base or a lack of new entrants, which is especially problematic for cryptocurrencies as an emerging asset class.
ADA and LTC 3-day average spot trading volume, USD. Source: Messari Screener
Although starting from a much lower base three months ago, ADA’s trading volume soared in February, while Litecoin was unable to surpass the $2 billion daily average mark. Meanwhile, ADA’s aggregate spot trading volume at exchanges currently sits at $2.8 billion.
ADA and LTC 7-day average transfers and transactions, USD. Source: Coin Metrics
Cardano’s on-chain metrics also provide insight into its rising use and ADA’s rising open interest. Data shows that up to November 2019, both networks shared a similar level of transfer and transaction value. By mid-2020, Cardano took the lead, getting 10 times more on-chain activity. This difference is now 5 times larger.
Overall, both trading data and on-chain metrics validate ADA’s futures open interest flipping Litecoin’s.
VORTECS™ score (green) vs. ADA price. Source: Cointelegraph Markets Pro
Data from Cointelegraph Markets Pro illustrates that the number of tweets from unique accounts discussing Cardano is 24% higher than the 30-day average over the past 24 hours. Tweet volume is one component of the VORTECS™ score that identified bullish conditions for ADA on Feb. 18, before the recent price surge.
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