While all eyes may now be on Bitcoin and Ethereum, Cardano (ADA) has been one of the best performing digital assets over the past day. According to data from Coin Market Cap, the popular altcoin has surged over 11% in the past 24 hours, moving towards $0.14 once again.
As of this article’s writing, the altcoin changes hands for $0.137, making it the sixth-largest public cryptocurrency in circulation.
This price action comes as Cardano’s developers have confirmed that the Shelley hard fork has started.
Shelley is an upgrade to the blockchain that will implement proof of stake — likely boosting the adoption and usability of the blockchain and its native cryptocurrency. As the Cardano Foundation describes Shelley on its site:
“Shelley will also see the introduction of a delegation and incentives scheme, a reward system to drive stake pools and community adoption… Come the end of the Shelley era, we expect Cardano to be 50-100 times more decentralized than other large blockchain networks.”
Going live: https://t.co/iTz1APNOzI
— Charles Hoskinson (@IOHK_Charles) July 24, 2020
Should all go well, the upgrade will go fully live on July 29th, activating Shelley.
Analysts Bearish on Cardano Due to Technicals, On-Chain Metrics
Analysts are divided over what comes next for the popular cryptocurrency.
NewsBTC contributing analyst Ali Martinez shared this chart below just days ago, writing that:
“The TD sequential indicator presented a sell signal on #ADA’s 3-day. The bearish formation developed as a green nine candlestick anticipating that #Cardano is bound for a one to four candlesticks correction.”
The TD Sequential is a time-based indicator that prints “9” and “13” candles at inflection points in the trend of an asset. This latest signal suggests Cardano will retrace against the dollar.
Adding to the expectations of a drawdown, blockchain analytics firm Into The Block’s Cardano dashboard currently indicates that the asset is “mostly bearish.”
As to why they’re accessing ADA as “mostly bearish,” Into The Block cites the following four of its core metrics: In the money, large transactions, smart price, and the bid-ask volume imbalance.
There has also been a sentiment shared by some market commentators that altcoins are poor investments when Bitcoin looks poised to breakout. The head of technical analysis at Blockfyre, a crypto research firm, recently wrote:
“If $BTC and $ETH start trending. I’d be cautious on longing #ALTS. Especially if this is the start of a new BTC trend upwards. The most likely out come would be alt/btc pair ratios getting drained while BTC moved past 10.5k in that scenario. I also wouldn’t look to fade 1st move.”
Fundamentals May Aid ADA
Fundamentals may help ADA prevent a breakdown, though.
With the launch of Shelley and other developments in the Cardano ecosystem, demand for services on the Cardano blockchain may spike, leading to an increase in demand for ADA. Bill Barhydt, the chief executive of Abra, said in a July 2nd blog on Shelley:
“Many are super bullish on the project and expect great things while others consider the project vaporware such that any failure to deliver would result in a precipitous drop in the token’s value. My take is that competition in the cryptocurrency space is always a great thing and is exactly what we need to accelerate the pace of adoption and improvement.”
This was echoed by the blockchain’s founder, Charles Hoskinson. He said that Shelley may soon allow Cardano to encroach on the market share Ethereum has carved out for itself.
Featured Image from Shutterstock Price tags: ADAUSD, ADABTC Charts from TradingView.com Cardano Surges 11% as Shelley Launches: What's Next for ADA?