With the cryptocurrency market remaining relatively calm at the moment, investors who identify undervalued digital assets can unlock significant profit potential.
In this context, an analysis shared by DBCrypto on August 15, 2024, highlighted a promising cryptocurrency that appears to be undervalued based on the Market Cap per Daily Active Address (MCDAA) metric.
DBCrypto’s analysis drew attention to four cryptocurrencies—Avalanche (AVAX), Polkadot (DOT), MultiversX (EGLD), and Cardano (ADA)—by comparing their market capitalization with the number of daily active addresses to derive the MCDAA.
At the time of the post, Avalanche had a market cap of $9.2 billion and 35,000 daily active addresses, resulting in an MCDAA of $262,000. Polkadot had a market cap of $6.5 billion and 4,000 daily active addresses, yielding an MCDAA of $1.6 million.
MultiversX, with a market cap of $740 million and 20,000 daily active addresses, had an MCDAA of $37,000. With a market cap of $15 billion and 25,000 daily active addresses, Cardano led to an MCDAA of $600,000.
According to DBCrypto, MultiversX is significantly undervalued, with an MCDAA of just $37,000 compared to its peers. This low ratio suggests that each active user on the MultiversX network represents a smaller portion of the market cap, indicating potential growth opportunities.
DBCrypto’s post was a response to an analysis by a user with the pseudonym Solver, who initiated the comparison of daily active addresses and market capitalizations for these cryptocurrencies.
MultiversX value proposition
Solver emphasized the notable difference in the number of active users relative to the market cap, allowing investors to draw their own conclusions about each cryptocurrency’s value proposition.
While the MCDAA metric is not without its limitations and should be considered alongside other factors, it provides an intriguing perspective on the relative value of these assets. DBCrypto’s analysis highlights the potential of MultiversX as an undervalued asset, suggesting that it may be poised for significant appreciation if it continues to attract active users.
MultiverseX price analysis
In the meantime, on the weekly chart, MultiversX has experienced a notable decline, with the price falling from approximately $28 on August 11 to $25 as of press time. This represents a drop of around 9.6%, reflecting a bearish trend that has persisted throughout the period.
EGLD seven-day price chart. Source: Finbold
Throughout the week, the price appeared to find support around the $26.00 mark, as it did not fall below this level, indicating that buyers might be stepping in at this price point. However, the resistance at $28, where the price initially started to decline, remains a significant barrier to any potential recovery.
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