ADA/USD Technical Analysis
The Latest Cardano (ADA) News
As of 2022, Cardano has seen significant price declines following the crypto bear market. ADA started the year around $1.39, but has since fallen to hit a low of $0.40 in May - a loss of around 70%.
With a broader drop in risk assets like equities and crypto, partly due to interest rate hikes, ADA faces the potential of further losses should interest rates keep climbing. As of August, ADA has seen a relatively lackluster recovery compared to other tokens, up around 47% to its current peak of $0.59.
Investors are currently eyeing two upgrades to the Cardano network as catalysts for the next bull run: the Vasil hard fork, and the release of the Basho upgrade. Both intend to increase the network’s capacity and scalability in different ways.
Cardano development is done in phases, with Vasil part of phase 3, while Basho is phase 4. Basho is yet to see a release date, although expected in 2023. Vasil, however, was supposed to be released in June and then July. As of August, no date has been set, and is likely suppressing price as investors become frustrated with a seeming lack of progress.
Once dates are confirmed, ADA will probably appreciate as investors flood in hopes of higher prices after these significant upgrades.
About Cardano (ADA)
Cardano (ADA) is an open-source, decentralized proof-of-stake (PoS) platform that can run smart contracts. It’s designed to be more efficient and sustainable than existing proof-of-work (PoW) networks like Bitcoin and Ethereum.
Cardano’s native token is called ADA and is currently #8 in the world’s top cryptocurrencies, with a market capitalization of over $18 billion in August 2022. ADA is the reward given to users participating in Cardano’s staking system, which validates transactions and keeps the blockchain active. It runs on the Ouroboros consensus protocol.
The supply of ADA tokens is capped at 45 billion and can be used to carry out transactions on the Cardano network as well as traded against other fiat currencies or cryptocurrencies. It is most popularly traded against the US dollar, represented by the symbol ADA/USD.
In terms of new developments, Cardano is next only to Ethereum, with the Cardano network undergoing upgrades regularly thanks to its peer-review-research model. The ever-evolving nature of its blockchain and the number of use-cases is one of the reasons why this cryptocurrency has remained a fan favorite, with the price of Cardano growing from a low of $0.02 to $3.09 between March 2020 and September 2021.
Cardano is known as a third-generation cryptocurrency, one that was built after the launch of Bitcoin and Ethereum to solve the problems that plague their blockchains. Cardano's primary purpose is to improve scalability, flexibility, speed of transaction, and energy use.
Cardano isn’t just a digital transaction medium, however. It can execute smart contracts, be used to develop decentralized finance (DeFi) platforms, and act as a foundation for digital apps to be built on.
What sets Cardano apart from several other blockchain networks is that its function is split into the settlement and computational layers. This is done with passing regulatory compliance in mind.
The settlement layer supports near-instant transactions of ADA coins with minimal fees. The computational layer activates the PoS protocol, allowing Cardano to run smart contracts and ensuring security. Because Cardano is built using peer-reviewed research, it employs a strong use of mathematics and is provably secure.
The team behind Cardano is constantly busy working on the project, with “eras” of development being named after notable historic figures. It’s currently in the Basho era of scaling and optimization. Voltaire is intended to be the final phase, bringing voting and treasury management to the network. Once complete, Cardano will be a viable Ethereum contender and, as it was built with compliance in mind, likely see adoption worldwide. This would drive the price up to unimaginable heights.
Cardano's development began back in 2015 and was launched in 2017. Its founder, Charles Hoskinson, was a co-founder of Ethereum and left the Ethereum development team after a dispute with Vitalik Buterin, one of Ethereum’s main proponents today.
Debuting in its Initial Coin Offering (ICO), ADA had a market cap of $600m; in May 2021, this figure hit $77b. ADA is named after Ada Lovelace, a 19th-century mathematician. ADA’s sub-unit is a Lovelace (1 ADA = 1m Lovelaces), like Bitcoin’s sub-unit is a Satoshi.
Cardano didn’t launch with a white paper like most crypto projects; instead, it has been developed from a series of academic papers. From its inception, it was aimed at solving the problems of Bitcoin and Ethereum, the former being too slow, resource intensive, and inflexible, and the latter being unsafe and unscalable.
Cardano is governed by three independent entities: the Cardano Foundation, IOHK, and Emburgo. The Cardano Foundation is a non-profit aimed at boosting the adoption of ADA; IOHK is where most of the research is carried out and has strong ties to several leading universities; Emburgo develops and supports commercial solutions based on Cardano.
Cardano works in phases:
- Phase 1 is called Byron, which was released in 2017 and allowed users to send and receive transactions.
- Phase 2 is called Shelley and brought staking to the network in 2020, boosting security and ADA’s popularity.
- Phase 3 is called Goguen, which brought smart contracts to the Cardano network in late 2021. This release also brought along the Marlowe smart contract language, aimed at non-programmers to enable the easy creation of smart contracts.
- Phase 4 is called Basho and is currently unreleased in 2022. It aims to boost the transaction speed and scalability of the Cardano network.
- Phase 5 is called Voltaire and is the final phase. It will bring governance to the blockchain and enable users to vote with their tokens on what development should be done next. Holders will also be able to propose changes to the network that other users can vote on.
Cardano Price Factors
ADA experiences considerable volatility like other cryptocurrencies but can provide valuable trading opportunities when traded carefully. Several factors drive volatility in Cardano’s price, including:
Development and innovation in Cardano
The Cardano blockchain is continuously being improved and worked on. With new releases, investors become more confident in Cardano’s long-term prospects, and this speculation drives prices higher. Conversely, delays in releases can frustrate and scare investors, causing short-term drops when delays are announced.
When on-chain volume grows, and the network gains more users, the value of ADA rises, not only due to long-term investment in ADA but from short-term speculation that the network will keep growing in users. As adoption from big institutions and businesses increases, investors will also see this as a sign to be bullish on ADA and buy up more tokens.
Like other cryptocurrencies, ADA is highly correlated with Bitcoin, holding a 0.77 correlation in 2022. This means that when Bitcoin rises, Cardano will come along for the ride. Events that impact Bitcoin can also affect ADA’s price, even if they have nothing to do with Cardano.
Cryptocurrencies have become increasingly correlated with equity markets in recent years, with Bitcoin sometimes following along tightly. This has a knock-on effect on Cardano. If interest rate hikes are announced, for example, this will likely have a negative effect on the price of cryptocurrency. Meanwhile, lower inflation when inflation expectations are high spells good news for the markets, including crypto.
Supply and demand
The creators of Cardano fixed the number of ADA coins at 45 billion at launch. During its ICO, Cardano sold over 25 billion ADA coins and planned to release the remaining 19 billion tokens as rewards for validating transactions. While the supply side of ADA is fixed, the demand for ADA isn’t. As new developments and innovations are released, demand will only increase, pushing up the price of ADA.
Just like other cryptocurrencies, trading Cardano (ADA) means you need to have a solid foundation based on a strong understanding of markets and the fundamental factors that drive crypto prices. You could, for example, enroll in an online course to learn the basics of cryptocurrencies or make use of Youtube channels that will teach you how to trade.
It’s also essential to stay up to date with the latest developments that occur in the cryptocurrency field, and in particular, the developments of the Cardano network. Getting to know the network will put you at an advantage, especially if you can be one of the first to know when a new release will come out. Charles Hoskinson is a particularly vocal voice in the crypto sphere, so make sure to follow his comments as they come out.
Given the high level of volatility in the crypto market, you may fare better by simply buying Cardano and ignoring the price, holding for the long term. This tends to be much easier on your emotions if you buy based on fundamentals, not what the market is doing at any given point. Still, it’s worth staying up-to-date with Cardano in case anything catastrophic does happen.
ADA/USD - FAQs
Cardano is a blockchain platform that supports transactions of ADA coin - a digital currency. Cardano's cryptocurrency network offers an open-source, decentralized smart contract platform launched by a co-founder of Ethereum, Charles Hoskinson, in 2017.
You first need to create a Cardano wallet that can store your capital in the form of ADA coins. To trade this cryptocurrency, you will then need to set up an account on a cryptocurrency exchange. You can then trade ADA coins against other cryptocurrencies and even fiat currencies on crypto exchanges.
ou can store your ADA coins on popular web wallets that support Cardano or use a desktop wallet. A desktop wallet will offer greater security but can only be accessed from a single device, unlike a web wallet. You can also use a mobile app to store ADA. A popular desktop wallet to store ADA coins is the Daedalus desktop wallet - the official Cardano desktop wallet that also lets you create an ADA paper wallet via the app for greater security.
You can use ADA coins as a regular payment method to purchase goods and services online using the payment gateway AdaPay, which allows merchants to accept payments made using Cardano.
Most countries around the world allow users to buy and sell cryptocurrencies, including Cardano/Ada, even though they are not recognized as legal tender by governments yet. However, some countries such as Algeria, Bolivia, Bangladesh, and Nepal have imposed a ban and consider the sale and purchase of digital currencies illegal.
The UK is yet to fully regulate the cryptocurrency market, although the Bank of England has in the past stated the need to regulate this space.
The Cardano blockchain network is still in development and announces new features periodically. However, Cardano is still at higher risk for volatility, especially as negative news in the media about cryptocurrencies and their regulation comes out. If you are trading ADA, ensure that you are more comfortable with higher exposure to risk than when trading conventional financial instruments.