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Is Cardano (ADA) dead?  • Bear Market Analysis • Benzinga Crypto


Don’t think Cardano (ADA) is dead? You can buy it on Coinbase today!

Cardano is a layer 1 blockchain founded by Charles Hoskinson. Hoskinson is also the co-founder of Ethereum but left the project in search of a more scalable solution. Although Cardano remains one of the top ten coins by market capitalization, it has struggled to find utilities, developers, or technical advantages over other cryptocurrencies.

The pressure for Cardano to show its promised scalability has started to mount, and investors are growing impatient with Hoskinson and his team. The coin, which has far fewer use cases than Ethereum, has begun to reflect such shortcomings in its price. Is this the downfall of Cardano from Hoskinson?

Why is Cardano down?

The obvious reason why Cardano is down is that, like all other cryptocurrencies, it tracks the price of Bitcoin. Rising interest rates, reduced quantitative easing, and foreign policy uncertainty weighed heavily on the crypto market and stock indices.

Crypto has largely evolved in conjunction with the Nasdaq exchange, which means blockchain is seen as a technology investment rather than a store of value. This makes sense in some ways, as tech prices tend to be based on future potential. Crypto is also largely based on speculation; only the most developed projects today have strong use cases. Much like money flowing from speculative tech stocks to value stocks, we see money flowing from speculative altcoins like Cardano for more tangible investments or just cash.

As the rush for liquidity continues, crypto investors are likely to sell their less useful holdings first. Financial analyst and crypto trader Zach Watson made a bearish statement on Cardano: “It’s ridiculously slow in terms of transactions per second, compared to other coins. That’s 250 TPS compared to Solana at 65,000. The team still says it comes with faster features, better improvements, etc. Yet everything is still pushed and delayed, so their actual product hasn’t done a thing yet. This frustration turned out to be shared within the crypto community; even the most loyal Cardano holders are starting to show frustration as the coin only touched 40 cents this month.

Cardano Price Movements

With all-time highs near $3, Cardano’s ADA token now rests at around 50 cents. With ADA at over 80% of its all-time high, the coin still holds a market cap of over $17 billion, which keeps it in the top ten by token market cap. Just two slots below, at number 10, is Dogecoin with a market cap of $11 billion. This comparison shows that community and hype can definitely boost high crypto valuations. With no real utility or technological advancement, these speculative tokens will likely be the first to fall.

Cryptocurrency market cycle

Crypto markets go through a multitude of cycles. However, the market’s infancy makes it difficult to understand the cycles the crypto goes through, at least compared to stock indices like the S&P 500. While the stock market has historically performed poorly in the summer months compared to the winter, no such link has been reliably traced in crypto. The seasonality of the stock market is the origin of the expressions “Santa’s rally” for winter markets and “sell in May and go” for summer markets.

An inability to predict market cycles hasn’t stopped the market from earning nicknames. Two market cycles emerged. One of them is “crypto winter”, which acts a bit like a bear market for the stock market. Bitcoin and all other altcoins are facing intense selling pressure and losing much of their valuation. Like a bear market, the crypto winter typically lasts for months rather than years.

The other cycle that begins when Bitcoin price crashes or weakens is “altcoin season”. This is when altcoins like Ethereum, Cardano or Solana increase in price relative to that of Bitcoin. The first true altcoin season was in late 2017, early 2018. It’s still unclear what cycle the market is in, but as Bitcoin crashes and altcoins follow, it certainly feels like the first.

Where to buy Cardano

Exam in 1 minute

Coinbase is one of the largest cryptocurrency trading platforms on the internet. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes it exceptionally easy to buy and sell major cryptocurrency pairs.

You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and enhanced functionality.

Although Coinbase doesn’t offer the most affordable prices or the lowest fees, its simple platform is easy enough for complete beginners to master in as little as a single transaction.

Best for

  • New Cryptocurrency Traders
  • Cryptocurrency Traders Interested in Major Pairs
  • Cryptocurrency traders interested in a simple platform
Advantages

  • Simple platform is easy to use
  • Full mobile app mirrors desktop functionality
  • Coinbase Earn feature rewards you with crypto to learn more about available coins
The inconvenients

  • Higher fees than competitors

Cardano can be purchased on most cryptocurrency exchanges, including Coinbase Global Inc. (NASDAQ: COIN) and Binance. Cardano can also be traded on a decentralized exchange (DEX). If you have a cryptocurrency wallet like MetaMask, you can log into a site like Uniswap and start trading a wrapped version of ADA on Ethereum’s network, sADA.

So, is Cardano dead?

This sale is unlikely to be Cardano’s last. Although the team was under-delivered, the community is large and Charles Hoskinson has proven to be a presence in the crypto space. It will take many more cryptocurrencies to disappear before Cardano is in danger of extinction. That said, Terra (LUNA) has become almost worthless, and the coin was above Cardano in market capitalization a few weeks ago. Although the two tokens are different in their technicality and purpose, this recent event has shown that no cryptocurrency can truly be considered safe.


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