Crypto

Market Direction to Influence Cardano Trajectory

Cardano $ADA Crypto

For crypto investors, the recent trading days have indeed been tough. Cardano (CCC: ADA-USD) holders and HODLers, on the other hand, have had a considerably more difficult time.

Last month, Cardano (CCC: BTC-USD), Ethereum (CCC: ETH-USD), and its “Ethereum killer” competitor Solana (CCC: SOL-USD) underperformed, while Bitcoin (CCC: BTC-USD), Ethereum (CCC: ETH-USD), and its “Ethereum killer” rival Solana (CCC: SOL-USD) did well.

Regrettably, this hasn’t prevented Cardano, including other cryptos, from falling in value during the last month. The saddest part is that the crypto sell-off appears to be picking up steam. Stocks and digital assets are being weighed down by concerns about Covid-19’s Omicron version and changes in Federal Reserve regulations.

Due to the following, Bitcoin has returned to its previous level of $50,000. Ethereum momentarily dipped below $4,000 for a second time. In the event of ADA-USD, what are the options? It’s far below $1.50 and getting close to $1.30. While Cardano appears to be losing even more of its gains from 2021, the underlying fundamentals of this altcoin may be improving.

Although Cardano appears to be a leading contender to replace Ethereum, this may not convert into a price rebound for the coin. At least, if the change to a risk-off mindset persists and cryptos continue to plummet.

What’s going on with Cardano?

There have been a few changes with ADA-USD in recent weeks, aside from its recent market movement. Cardano’s success in turning its network into a significant DeFi platform is one key benefit.

Cardano’s smart contract functionality (added during the Alonzo updates) has piqued the eye of dApp developers. As Ethereum established its DeFi supremacy and Solana, with its significantly faster speeds, continued to displace it as the main Ethereum killer, there was worry that it would be left in the rubble.

Cardano has made headway in terms of the number of wallets staking it, thanks to increased interest from the DeFi/dApp community. The number of wallets staking ADA-USD surpassed one million on December 5. This, too, alludes to growing DeFi adoption and supports the bull case for it in the long run. Yet, there has been one huge negative event in addition to these bits of good news.

It has been removed from eToro’s cryptocurrency exchange. This piece of information only played a minor effect on Cardano’s price fall. It’s not just that, but it has subsequently been offset by market forces on the token, which is expected to continue in the next weeks, if not months.

Why the ADA-USD Depreciation Isn’t Over

Cardano may see a slow but significant price increase if blockchain finance continues to gain popularity and its network emerges as one of the most extensively used in DeFi.

However, it may be some time before this begins to play out. For the time being, crypto prices may continue to decrease as Omicron/Fed concerns force investors to take a protective stance.

What about in the long run? It may go in one of two directions from here. Initially, let’s look at the more optimistic scenario. After the recent market turbulence passes, crypto adoption by the general public may accelerate. More cash could flow into this asset class as a result, allowing it to rebound and achieve even greater levels.

In a more pessimistic scenario, however, blockchain finance will fail to reach a critical threshold. The market, in turn, re-evaluates cryptocurrency market valuations.

The Author

Oladotun Olayemi

Dotun is a financial enthusiast who specializes in first-in-class financial content, including crypto, blockchain, market, and business, to educate and inform readers.