Everything Looks Good for Cardano, Yet ADA Coin Keeps Falling
Cardano used to run along with the cryptocurrency market, surging in the first several months of 2021, then resuming the uptrend again in August and surging from $1 to $3. But, since September Cardano has been bearish and it has lost the connection to the price action of the broader market. Cardano kept sliding lower in August and early November when main cryptocurrencies were surging once again. Cardano has lost ranking in terms of market capitalization, falling to numbers 6 and it doesn’t seem like the decline is ending anytime soon, especially as the market continues to remain bearish for about a month now.
Moving averages provided some slight support as the price kept falling but they were broken one after another and now the 20 SMA (gray) has turned into some kind of resistance. The price broke the first support at $1.50 and now it seems to be heading for the second one at $1, which was the ultimate support during the bearish times following the crash in May. Although, fundamentals look solid for Cardano, so at some point, ADA coin will resume the bullish trend.
Cardano coin heading the second support at $1
Alonzo Upgrade Has Some Flaws
With the Alonzo upgrade, Cardano will enter deeper into decentralized finance, competing with the likes of Ethereum. So, Cardano should benefit from the prospect of having to use the blockchain’s native token ADA to buy an NFT, make a payment or take part in an online game. But as we mentioned, Cardano has actually been declining since there have been some issues with the upgrade.
The EUTXO-based protocol has proven to be challenging for developers of decentralized applications, while the first DEX to launch on Cardano testnet, Minswap, faced immediate scaling issues in September. Users testing Minswap were also finding that the dApp could only handle one transaction per block. Although Cardano officials has said to be taking care of these issues.
First Dex on Cardano
Decentralized exchanges (DEX)are becoming increasingly popular with the crackdown on cryptocurrencies and on centralized crypto exchanges. The Alonzo upgrade has opened the door for such exchanges to be built on the Cardano network, so the first DEX launched the public testnet. Sundaeswap is the first time a project (DEX) has leveraged Cardano smart contracts to exchange tokens. Earlier in September, the team working on a DEX called MinSwap on Cardano testnet failed to achieve token swap functionality, so the fact that Sundaeswap is going well is positive for Cardano.
Charles Hoskinson says IO has started preparing for future attacks on the Cardano network from quantum-powered adversaries, by running multiple simulations to test Cardano’s algorithms. The recent jump in the average transaction size, to $83,704 from $23,877 previously shows that traders and investors are interested in the ADA coin at the current price so they are starting to increase their buy positions as ADA becomes cheaper during this slide. We are waiting to see if ADA/USD will reach $1 and probably go long down there.