- Cardano is still struggling with its price action despite setting expectations high.
- While Whales previously came to the rescue, they are nowhere to be found now.
- Prominent analysts are urging Cardano users to sell their ADA.
The Bitcoin ETF is finally a reality, but the market’s reaction has been far from expected as altcoins across the board, including Cardano, gradually descend toward their doom.
As the market slips towards their potential support levels, ADA holders find themselves on uncertain ground. DailyCoin expert analyst Insha Zia is here to shed light on these developments and offer insights into what to expect in the coming weeks.
Table of Contents
News and Events: Understanding the Impact
Cardano Falters As Bitcoin ETF Hype Dies Down
December 2023 was an exciting period for the altcoin market fueled by the market’s anticipation for the Bitcoin Spot ETF. Cardano saw an impressive 80% gain during this period after consecutively closing in the green, setting a promising tone.
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After the Bitcoin ETF brought an unexpected calm to the market post-approval, it pivoted and erased a significant portion of Cardano’s gains despite indicators pointing towards ADA’s potential ascent beyond 2023 highs,
As the hype surrounding the ETF settles down, altcoins, Cardano in particular, face a daunting descent. Since the last DailyCoin regular, ADA witnessed an 11% drop, dipping below $0.5. While previously, the token instantly recovered by 14%, thanks to the Whales, unfortunately, even they are sidelined this time.
Calls for USDC on Cardano Intensify
As Cardano’s DeFi ecosystem expands, drawing in exciting projects for DApp development, calls for a fiat-backed stablecoin have intensified. Despite having algorithmic stablecoins like IUSD and plans for a USD-backed stablecoin, Cardano still needs a solid fiat-backed option from a major issuer like Circle or Tether.
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Taking notice of Cardano’s recent growth, community members are now urging USDC to be brought to the network. Dan Gambardello, the Founder of Crypto Capital Venture, led these discussions, listing several advantages, including easier onboarding, enhanced interoperability, and greater market confidence. Gambardello even suggested that the USDC Issuer Circle consider applying for Catalyst funding.
However, despite the push for USDC integration, some Cardano influencers caution that the network may not fully meet Circle’s requirements, emphasizing that the stablecoin issuer must compromise or forgo their demands for freezing and reversibility.
Interestingly, Cardano Founder Charles Hoskinson was of the same view in July 2023; sharing the protocol in its current guise couldn’t facilitate USDC and the issuer’s demands.
K33 Urges Cardano Holders to Sell in Scathing Report
Prominent crypto data aggregator K33, renowned for its in-depth analyses of market trends and protocols, recently sparked controversy with a report titled ‘Why You Should Sell Your ADA,’ targeting Cardano by branding it ‘useless.’
The blockchain analysis firm asserted that there’s no tangible evidence of Cardano’s utility and questioned the authenticity of a significant portion of its 90,000 daily transactions, suggesting artificial inflation. K33 pointed to the lack of a solid stablecoin option on the network, arguing that the lack of USDT or USDC generally means no meaningful DeFi occurs.
According to the report, the only stablecoins present are reportedly Cardano-collateralized, which K33 referred to as “another word for nothing.”
The report painted a bleak picture for Cardano, projecting a potential slide into irrelevance akin to other blockchain projects like IOTA, NEO, and EOS.
In response to the report, Cardano Founder Charles Hoskinson dismissed K33 with a terse “Who? Never heard of them.” While this response drew criticism from some ADA community members who felt it didn’t adequately address concerns, Hoskinson remained unfazed by the report’s implications.
Current Outlook
Cardano’s once bullish structure has dissipated, leaving investors and market participants uneasy as they offload their holding to larger players. While Cardano swiftly recovered from its fall to $0.49 previously, this time, ADA faces a prevailing bearish sentiment.
The reaction to dipping below $0.5 so far lacks vigor, indicating that ADA is likely to be on a quest for stable ground before it makes any recovery. At press time, Cardano’s long-to-short ratio remained negative, signifying a notable decline in investor demand.
The following weeks are pivotal for ADA as it looks to regain its once-dominant bullish structure and charge toward the previous year’s high and potentially the $1 mark.
With positive events on the horizon, such as Voltaire and Bitcoin Halving, the recent downturn may be perceived as a corrective phase before ADA resumes its upward trajectory. However, until stability is established, market confidence could continue to wane, casting doubts on its prospects of tapping $1.
On the Flipside
- Market dynamics can be unpredictable, so it is essential to consider alternative perspectives and opinions when evaluating the potential future performance of ADA.
- USD-backed Cardano native stablecoin Mehen is scheduled to launch in March 2024 but does not have the brand recognition or liquidity of USDC or USDT.
- Cardano’s yearly growth for 2023 closed at 170%.
Why This Matters
Cardano’s remarkable December rally has set expectations high for 2024. However, ADA isn’t performing on par with expectations, which could dent investor confidence. In the following weeks, the token must pick up pace and once again signal the onset of a bull run.
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