In the rollercoaster world of cryptocurrencies, this week specifically, Bitcoin, Cardano (ADA) and their rebellious siblings are experiencing a period of turbulence. The cause? The United States Securities and Exchange Commission (SEC) wagging its big, regulatory finger at the industry’s US based crypto exchanges.
The last 48 hours have been a dizzying spectacle of dives and climbs, as crypto markets take the SEC’s stern lecture on the chin and rebound with the kind of spirit one might expect from a ragtag bunch of digital mavericks. Markets now find themselves in a tranquil holding pattern, as traders scratch their heads and ponder the fallout from these impending lawsuits. Yet, it’s heartening to see that, rather than implode, the crypto universe has weathered the storm, signalling an evolving maturity.
In the unfolding drama, the SEC has pointed an accusatory finger at a star-studded cast of digital assets, including Solana (SOL), Cardano (ADA), Polygon (MATIC), and Filecoin (FIL), that are now, apparently, considered to be securities. As a result, their prices have taken a nosedive, careening into the abyss.
ADA Price Hysteria
A new plot twist surfaces! Prominent investors have hit the panic button on Cardano, kicking off a sell-a-thon while ADA transaction volumes are skyrocketing.
Cardano did a swan dive on June 5, sliding under the uptrend line of an ascending triangle and yanking the proverbial rug from bullish hopes. The loyal bulls tried to salvage the situation with a quick dip buy, but the bears had other ideas, stubbornly trying to transform the uptrend line into a wall of resistance. June 7 saw an encore performance, with the bears dragging the ADA price below the $0.33 line. Could ADA/USDT pair could now be spiralling towards the $0.30 support?
Yet hope springs eternal! A return into the channel would signal a resurgence of bullish energy, suggesting the previous dip was nothing more than a bearish decoy. A burst past $0.39 might even trigger a buying frenzy.
Ever since it hit its peak in September 2021, ADA has been on a 21-month slide, with only four months of this period showing a glimmer of green on the candlestick charts.
With 83% of Cardano addresses languishing in the red, and a mere 11.44% poised to turn a profit at current prices, it’s a grim scene. Meanwhile, transaction volumes are soaring while ADA prices plummet – a trend that points to a possible wholesale sell-off.
Adding fuel to the fire, the SEC, in its recent spat with US crypto exchanges, slapped ADA with the ‘security’ tag. This may well be sparking the uptick in transaction volumes as panic selling sets in.
The number of ADA whales has dwindled from 158 to 142, accounting for a 3% drop in the total token supply. Now, retail investors are filling the void left by their departure, indicating a changing of the guard, as the big fish offload their tokens onto the small fry.
According to data by Gate.io cryptocurrency exchange, daily active addresses have shot up by 41.5% in the last week, thanks to a flurry of DeFi activity that’s pushed the Total Value Locked (TVL) to annual highs. Total ADA addresses are also on the rise, signalling an influx of Cardano virgins alongside those keen on spreading their assets across multiple wallets. Interestingly, Twitter sentiment is resoundingly pro-ADA, with the tweet sphere buzzing with over 12,000 positive tweets versus a paltry 1,500 negative ones.
So what is Cardano?
For those out of the loop, Cardano is a crypto titan, flexing its muscles as a next-generation adaptation of Ethereum. Its blockchain aims to provide a flexible, sustainable, and scalable platform to run smart contracts, fostering an ecosystem for DeFi apps, new crypto tokens, games, and more.
As of March 2021, however, it’s been playing hard-to-get with its smart-contract functionality, keeping developers on their toes. An anticipated Q2 2021 upgrade is poised to roll out this feature, nudging Cardano closer to its aspiration of being a robust, secure, scalable, and eco-friendly blockchain platform.
Think of Cardano’s native cryptocurrency, ADA, as Ethereum’s ETH. You can trade ADA on exchanges like Coinbase, use it as an investment tool, make and receive payments, and even use it for staking and transaction fees on the Cardano network.
ADA token unpacked
Introducing ADA! This digital gem is the heart and soul of the Cardano platform and a fitting tribute to Ada Lovelace, a Victorian-era mathematical wizard often celebrated as the original code slinger.
In the Cardano universe, ADA tokens hold the same clout as ETH does on Ethereum. They grease the wheels of transactions and are wagered by validators (and their loyal delegators) eager to uphold the network’s fortitude. And what do they get in return? Only the sweet taste of digital rewards!
Looking ahead, ADA’s got some additional tricks up its sleeve. It has morphed into a governance token, empowering its bearers with the right to vote on the future evolution of the Cardano network. This isn’t just a token, it’s your ticket to shaping the future of Cardano! Let’s hope it is bright.
And as for the token’s value outlook, ADA price prediction engines by Gate.io crypto exchange project levels above $1.10 by 2030 and a continuous rise until then. This will be made possible if Cardano grows in utility use cases and becomes a mainstay for developers and the general public.