Cardano, once a leading blockchain of innovative technology and scientific research competing pioneer cryptos, is hanging on life support today amid its continuous price drops.
Most cryptocurrencies recovered from the market setback in 2022 and are showing signs of improvement as of the start of 2023 until today. However, this does not apply to the ADA token, which struggles to return to last year’s levels of $1, let alone reach its all-time high when the token traded for more than $3 in 2021.
We will shed light on the Cardano blockchain and its native token and the reason for its non-stop struggle this year.
Cardano is an innovative blockchain founded in 2017 with a proof-of-stake protocol, created with the purpose of competing Bitcoin and Ethereum blockchains.
Since its inception, Cardano has managed to grab investors’ interest due to its scientific-based approach and real-life use cases. The network implies reviewing ideas and research by a team of experts and scientists to challenge these ideas before putting them into practice.
This promoted the blockchain as a reliable source of information, providing real-life applications extending from supply chain management to tracking agricultural products.
Cardano was a promising blockchain, and these introductions caused ADA pricing performance to increase by 50% in one day in 2018 and remain steady until 2021.
In 2021, the network introduced the Alonzo network update to its blockchain, opening the door for DeFi and Cardano NFT marketplaces to emerge in its ecosystem.
This introduction caused the token price to climb gradually throughout the year and peak at $3.16 in August. However, the ADA token fell from grace a few months after its peak performance.
The crypto market stagnation in 2022 affected Cardano harshly, and the currency started trading below the Dollar threshold. However, the network did not give up, and a few network upgrades supported the token price to restore previous levels in March 2022.
However, this slight improvement did not last long, and the token price sunk again below $0.5. More network updates tried to resuscitate the token, which was recovering 5% one day and losing 12% the other day.
This downward trend continued till the end of 2022 when the Cardano token closed the year at $0.25. In 2023, many cryptocurrencies recovered, while ADA struggled to break the $0.5 threshold and kept swinging between $0.24 and $0.44 until the fourth quarter of 2023.
We take a closer look at the token price performance in 2023, trying to find any signs of hope to return ADA to its previous price levels. Our analysis was coupled with the exponential moving average (EMA) indicator to track previous price action and look for any potential.
As shown in the chart, we applied three timelines for the EMA indicator: 10-day, 50-day, and 200-day EMA lines. Throughout the year, the 10-day line crossed above the 50-day and the 200-day EMA lines, which triggered price recovery in April-May.
However, the 10-day EMA line sank heavily afterwards and moved away from the other two EMA lines. In August, the 10-day EMA briefly crossed over the 50-day line before falling again.
In September 2023, the 10-day EMA line lies below the 50-day and way further below the 200-day EMA indicator, telling us that no bullish market is expected in the short term.
However, the short-term EMA line moves steadily under the 50-day EMA line, minimising the losses and promising there is still hope to recover if the market picks up a bullish sentiment.
The blockchain architecture and innovative solutions tell us the chances are high for Cardano to survive in the coming years. Additionally, despite frequent setbacks, the network has been introducing upgrades to its blockchain, indicating that the developing team will not give up anytime soon.Short-term gains are not expected at the moment in light of the ADA selling rate today and the bearish sentiment of the token. Moreover, the token price recovery highly depends on the overall crypto market sentiment. If Fed interest rates start declining and SEC does not adopt ADA as a regulated security, we could see ADA max price by 2024 breaking through $5.