ADA/USD Technical Analysis
About Cardano (ADA)
Cardano (ADA) is a cryptocurrency as well as an open-source, decentralized platform that can run smart contracts. The internal currency used within Cardano is known as ADA and at its debut in 2017, had a market cap worth $600 billion. Unlike Bitcoin's proof of work system, Cardano's blockchain uses proof of stake technology based on Ouroboros.
The supply of ADA tokens is capped at 45 billion and can be used to carry out transactions on the Cardano network or even traded against other fiat currencies and 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 ADA as well as its network undergoing small changes on a constant basis, thanks to its peer-review-research model. The ever-evolving nature of its blockchain is one of the reasons why this cryptocurrency has been among the most bullish altcoins since April 2020, with the Cardano price growing in value by as much as 20 times from its all-time low of $0.0007.
Its developers term Cardano as the first "third-generation" cryptocurrency, aimed at removing the inefficiencies observed in Bitcoin and Ethereum. Cardano offers a faster, more flexible, scalable and safer alternative for transacting digital currencies. It is ranked fourth in terms of market cap with a value of over $20 billion as of February 2021, and enjoys high trading volume in the crypto market.
What sets Cardano apart from several other blockchain networks is that its function is split into two layers: settlement layer and computation layer. The settlement layer, which is complete and fully operational, supports transactions of ADA coins. The second layer - computation, is currently under development and once ready, will enable users on the network to create and enforce smart contracts, offering Cardano far more capabilities, and potentially driving up the ADA price in the future as well.
The team behind Cardano is already working on several developments, including Voltaire - which looks into governance of blockchain, transforming the system from a single-asset into a multi-asset one as well as a feature that will allow users to migrate from Ethereum to Cardano conveniently. Cardano's features are still in development and analysts expect the launch of Smart Contracts on the platform to drive the ADA rate up to as high as $1 and even further higher, possibly all the way up to $5 as well.Cardano Price Prediction
Cardano's development began back in 2015 until it was launched in 2017. The team behind Cardano's blockchain network features a mix of both academicians as well as engineers. Its founder Charles Hoskinson was one of the co-founders of Ethereum, who also co-founded BitShares before moving on to Cardano. Its Initial Coin Offering (ICO) successfully raised $63 million, with ADA coin's market cap soaring to as high as $33 billion since then.
Its foundation stage - Byron, started in September 2017, which launched the first version of Cardano, allowed for buying and selling of ADA on the network and helped build a community of supporters for the blockchain platform. The second stage - Shelley, was launched in July 2020, bringing in the proof-of-stake and offering of staking rewards to participants. The next stage, Goguen, is likely to launch by around March 2021 and will offer greater technical capabilities for developers to create more DApps and implement multi-asset transactions. Following this, the creators will release two more phases going forward - Basho and Voltaire, which will offer more features, scalability and complete decentralization capabilities.Cardano Price Chart History
Cardano Price Factors
Like most other cryptocurrencies, the Cardano rate experiences considerable volatility and offers ample trading opportunities, when traded with care. There are several reasons that can drive volatility in Cardano price, including:
Development and innovation in Cardano
The Cardano blockchain network that supports ADA tokens is in a constant state of flux - continuously innovating and adding new features. Every new stage of release of more technical capabilities builds investor confidence and sends the ADA price higher.
As more users join the Cardano network and use ADA coins for transactions, the value of ADA rate rises. Although it boasts of a large community base, a growth in the number of users will continue to contribute to its increasing value going forward, driving Cardano’s price higher.
Like other cryptocurrencies, moves in the ADA chart are also dictated to some extent by how the market reacts to Bitcoin. Whenever the price of Bitcoin rises, it takes other cryptocurrencies - Cardano included, higher, although the bullish trend may not be as strong. On the other hand, any negative news or developments that cause Bitcoin's value to diminish has a corresponding effect on turning ADA price weaker.
Supply and demand
The creators of Cardano have fixed the cap on the number of ADA coins that can be mined at 45 billion. During its ICO, Cardano sold over 25 billion ADA coins and planned to release the remaining 19 billion tokens in the form of rewards for mining blocks. While the supply side of ADA is fixed, in the future as the Cardano blockchain develops further, the demand for its tokens could go up. In such a deflationary scenario, once all coins are mined, if the demand continues to rise, it can push up the Cardano rate as well.
Just like other cryptocurrencies, trading Cardano (ADA) needs you to develop a solid foundation based on an understanding of the fundamental factors that drive volatility in the crypto market overall and in ADA rate specifically as well. One way to do this is to enroll for an online trading course that will teach you the basics of how to trade cryptocurrencies, in addition to offering insights on how the technology behind them work, what to expect going forward, and their correlations with traditional financial instruments.
As a next step, ensure that you do adequate research and study up on all developments surrounding ADA coins and the Cardano blockchain platform. Getting to know when its creators will release the next phase can help you better prepare for trading ADA and give you an early mover advantage.
Given the high level of unpredictability and volatility that exists in the crypto market, we recommend that you consider entering long-term trades on Cardano to have a better control over your capital and to minimize losses. Even in such instances, it helps to stay abreast of all developments that can drive movements in the market, especially any news that can cause the Cardano price to go lower, so that you can limit your exposure to potential losses.Cardano ADA News
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 platform launched by a co-founder of Ethereum and BitShares, Charles Hoskinson, in 2017.
As a first step, you 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 this digital exchange.
You can store your ADA coins on popular web wallets that support this cryptocurrency or use a desktop wallet which offers greater security, but can only be accessed from a single device unlike the web wallet than can be accessed online via any computer or mobile device. A popular desktop wallet to store ADA coins is Daedalus desktop wallet - the official Cardano desktop wallet which 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 payment gateway AdaPay, which allows merchants to accept payments made using this cryptocurrency.
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 regulate the cryptocurrency market, although the governor of its central bank - 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, with lower adoption rates than other popular cryptocurrencies, ADA coins are at higher risk for volatility, especially negative news in the media about cryptocurrencies and their regulation. If you are trading Cardano/Ada coins, ensure that you are more comfortable with higher exposure to risk than when trading conventional financial instruments.