Article structure notification: the article is divided in three sections. First section is focused on short-term, technical and speculative analysis of the project – this is regularly updated part of the article. Second section is focused on general market and sentiment analysis and third section is focused on the long-term, fundamental analysis and future prediction of the project – this is occasionally updated part of the article.
On the short timeframe of 4H, there is a lot of going on.
ADA defended a very important support level, Fib236 of May 16th – May 13th high lows. This level is at 983 sats and it is a breakdown for ADA. Right now, it climbed back up to the Fib382 at 1047.
Breakout level is a confluence zone of previous high and bigger Fib50 level (and also MA200 of the daily timeframe) at around 1200-1220 sats. Target for ADA, should this get smashed, would be the recent high at 1484 sats.
On the daily chart, ADA is still in the intermediate bearish trend as all the moving averages are aligned in a declining order, widely considered a bearish trend indicator. The daily chart further confirms the 1200 sats zone as the ultimate resistance for ADA as the MA200 is also on that height.
One thing to bear in mind is the turbulent and erratic nature of bitcoin – a sudden thrust up or slide down is always on the cards which would invalidate this and all other analysis and predictions. In such cases, market is shaken up with most traders exiting altcoins and entering bitcoin positions or seeking shelter in stablecoins, especially in the initial phases of bitcoin pumps and dumps. So it is always a good idea to keep a close eye on bitcoin’s behaviour before opening a long or a short on any other coin in the market.
Should this happen, stop by again to check out our updated charts and thoughts.
Trading volumes, as usual, are not looking good – reported volume is around $179 million but the actual volume is $67 million, putting the reported volume into a 2.7x discrepancy to the “Real 10” volume (trading volume on the exchanges that prevent wash trading). This means that ADA’s liquidity is marginally inflated which is pretty much the case with the vast majority of coins.
On the other hand, ADA comparatively has a solid buy support, according to coinmarketbook.cc. Buy support is measuring sum of buy orders at 10% distance from the highest bid price. This way we can eliminate fake buy walls and whale manipulation and see the real interest of the market in a certain coin. ADA currently has $5.5 million of buy orders measured with this method, which sets ADA buy support/market cap ratio at 0.32% which is a somewhat low ratio, but still fares good among the bluechip coins. Bitcoin and Ethereum have a 0.27% and 0.28% ratios, respectively. This novel metric indicates there are a lot of manipulations, inflated liquidity and fake orders on ADA trading pairs.
Cardano’s market sentiment score, measured by the market analytics firm Predicoin, paints a neutral picture.
Predicoin wraps its analysis up into a single simple indicator known as the SentScore, which is formed from the combination of five different verticals: news, social media, buzz, technical analysis and fundamentals.
Cardano currently has a Sentscore of 4.2 which is defined as “the neutral zone”. You can see that Reddit buzz has been up and down with a slight decrease in the last week, while Twitter did the opposite and number of posts about ADA has gone up. Search volume on Google and other search engines, on the other hand, gradually declined over the month.
Overall, Predicoin’s Sentscore is an excellent indicator of community interest and can provide useful insight into which coins are trending right now.
Early May Update: Fundamentals
To assess fundamental health of a project, we used the FCAS metric. FCAS is a comparative metric whose score is derived from the interactivity between primary project lifecycle fundamentals: User Activity, Developer Behavior, and Market Maturity.
There are a few sub components which provide data to each fundamental:
User Activity is comprised of Project Utilization and Network Activity
Developer Behavior is comprised of Code Changes, Code Improvement and Community Involvement
Market Maturity is comprised of Liquidity and Market Risk. Market Maturity has less than 5% impact on a project’s overall FCAS.
FCAS ratings are on a 0-1000 point scale with a corresponding letter grade. Break points are based on standard deviations in the underlying component distributions.
900 – 1000 is marked as S for superb. 750 – 899 is marked as A for attractive. 650 – 749 is marked as B for basic. 500 – 649 is marked as C for caution. And finally, below 500 is marked as fragile. You can read more about it here.
Cardano has been ranked as the A category – attractive with overall 870 points as of May 8th. By far the strongest metric that contributed to this great score is developer activity that got 918 points, followed by user activity with 861 and market maturity that had 612 points. This data backed fundamentals valuation model is a good insight into underlying driving forces of a project and as you can see ADA fares excellent under the scrutiny of FCAS.
Below are some of the most important news
around the project in the last 30 days.
- The last major work in the Byron code base was completed for Cardano 1.4, and for 1.5 IOHK limited work to only those changes required for a smooth transition to Shelley. The release of Cardano 1.5 marks the start of the shift from the Cardano Byron era to the Shelley era and is an excellent opportunity to describe the ongoing work for Shelley and how the transition will happen.
- Following weeks of anticipation fueled by numerous interviews that analyzed its potential, new Shelley formal specifications were revealed on IOHK Summit 2019. The new project’s goal is to bring decentralization to Cardano (ADA) by handing control of the ledger over to the community via stake pools.
- Ethiopia’s Ministry of Science and Technology has signed a memorandum of understanding (MOU) with Charles Hoskinson, CEO of Cardano (ADA). Ethiopian government aims to benefit by using Cardano‘s blockchain in domestic agriculture.
Below is our long-term forecast where we cover general market movements and sentiment shifts before delving deeper into the specific predictions for ADA.
Year in Review
ADA entered the last year like the rest of the markets, floating in a giant bubble fueled by the biggest bull run seen to date in cryptocurrency. During this time, ADA reached an all time high of $1.32, but just one month later, at the start of February, ADA dropped down to $0.27.
The slipping of Cardano’s price continued through February and March, as ADA fit into the the overall market’s downturn.
From April through May and into June, Cardano saw no major announcements and consequently, ADA failed to really make any significant movements.
During June, IOHK did however announce a rebrand of the Cardano project. This wasn’t an attempt to totally renew the idea of Cardano
October did present one of the biggest announcements from within the entire Cardano structure, a move from IOHK and Emurgo (two of the teams behind Cardano) to take over total control of the project from the Cardano Foundation, an entity that Charles Hoskinson did not believe was pulling its weight with regards to the progress of Cardano.
This, eventually let to the resignation of Michael parsons, the chairman of the Cardano Foundation in November 2018, allowing IOHK and Emurgo to take a more prominent lead in order to take the Cardano project to the next level, through 2019.
ADA Roadmap for 2019
Cardano is set to drastically change its roadmap after the IOHK Summit that is supposed to be held in Miami on Apr. 17-18. The timer has been removed from the current roadmap page.
The Cardano team intended to finish Shelley by Q3 2018, but the development deadlines have been extended to Q1 2019. And this is one of the biggest events for Cardano since its inception.
Shelley is the second phase of Cardano roadmap that will make its blockchain actually decentralized. ADA is currently in Byron, the bootstrap phase, where they are making improvements and debugging the code.
Shelley consists of 3 main functions:
- Incentives: Provides stakeholders with monetary incentives to ensure that the system runs smoothly
- Delegation: Allows stakeholders to delegate their right and obligation to sign blocks to a third party
- Networking: Provides network infrastructure to support decentralization
After implementing Shelley phase, ADA is set out to introduce the Cardano Improvement Proposals, or CIPs with a built voting system, details of which will be released soon. Initially, IOHK will make all CIPs, there will, however, be an increasingly better mechanism for gaining consent for them.
Part of the ongoing projects is scientific research that has made possible a gradual shift from the lab to coding. This has facilitated the revision of Ouroboros and has also brought together game theorists as well as programming experts to try and identify new applications for the Cardano ADA network.
Chance to overtake Ethereum
You can’t build anything remotely serious on Ethereum right now. You can’t say “sorry, our enterprise grade application for banks is not working since Cryptokitties got popular again”. And that’s just scalability. You need regulations to be in place too. Businesses need to know what we can and can’t legally do within this space. Besides scale, that’s the biggest factor holding us back. The security part of Ethereum is icky at best too.
Either Ethereum scales, or everyone moves on to the next protocol and if Shelley does what it promises, Cardano is going to be the prime candidate to take over the throne.
Overall, the Cardano roadmap has five phases — Byron, Shelley, Goguen, Basho, and Voltaire.
In the Goguen phase that is also already underway, the focus will be on the Universal Language framework development, IELE development, and security improvements. For investors, this phase is where the token will gain more utility with the execution of complex smart contracts. Other phases will not start before 2020.
The Basho phase will improve scalability, security, and performance by implementing a revised network layer as well as Ouroboros Praos, the next generation protocol of Cardano’s Proof of Stake consensus algorithm.
The Voltaire phase is the final phase of Cardano’s current roadmap. In Voltaire, we will see the implementation of a treasury system and a governance model.
How to evaluate fundamentals of a crypto project
We should consider crypto valuations like educated gambling, a ‘prediction market’ where we are betting on the odds of project and token success. There are some catalysts of success we can identify:
- Project success drivers (user traction, strong financial bottomline, good treasury management, network effects/synergies between users and token investors)
Real user traction is the most important driver of success, that is what most of holders call “adoption”. If people start using certain crypto project because they find it useful and it makes their life easier, that is a guarantee of success. So far, almost no crypto project can claim to have done so.
Strong financial warchest that will enable teams behind the project to develop their visions, incentivize other developers to join them and start using their product is also a crucial aspect of any project. Tied into it is treasury management – especially for the project that had big ICO proceeds. Temptation to squander all those millions into “conferences and events” (read hard-core partying on yachts and luxury hotels) was massive, especially if we consider that majority of token projects founders were no-names and ordinary employees that worked for a paycheck before the ICO fairy-tale happened to them.
Another adoption indicator – network effects, where every additional user of a good or service adds to the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.
If you can objectively notice that your favorite token project has some of these traits happening for it, be happy – you might have found a winner.
- Token success drivers (favourable demand-supply dynamics, programmable incentives on token, aligned incentives with management team and consensus on token as common unit of value creation).
Token success is completely dependent on tokenomics. As defined by infloat.co, tokenomics involves the incentivization of certain stakeholders to ensure particular behavior.
So, tokenomics is essentially an incentive structure designed to ensure that a token has a purpose and utility within its native network. It is the study of how coins/tokens work within the broader ecosystem that can be considered as a sovereign micro-economy. This includes such things like token distribution as well as how they can be used to incentivize positive behaviour in the network.
For example, bitcoin is designed to ensure that bitcoin miners have a reason to mine new bitcoin. Miners validate bitcoin transactions and receive (or create) newly minted bitcoin in the process.
On the other hand, individuals, businesses and other bitcoin users pay a transaction fee for miners to include their transaction in the next block. This ensures that even when all bitcoin have been minted (to the tune of 21 million, which should happen in around 2140), bitcoin miners are still incentivized to keep ‘mining’ (i.e. validating transactions).
To paraphrase all of the above in the simplest terms: if you, after weeks of research and reading, can’t figure out why the project needs to have a token, it probably doesn’t.
So why does the token exist then?
– To make the project founders rich.
But there are some people on Twitter, Reddit, Telegram claiming otherwise.
-Yes, they are either: paid to do so by those same founders, they are desperate and delusional bad holders or they are just stroking their own ego with newly learned fancy economic terms and jargon.
Needless to say – stay clear of such projects.
General Market Movements and Sentiment Shift
The downfall of altcoins that were mainstream media darlings at the start of the year, ADA among them, can be attributed, in part, to novice investors getting scared off once the bear market kicked in with a vengeance. Time of easy 10-100x gains on obscure altcoins are forever gone; even you if have best possible crypto signals, you will have to settle for much lower ROIs (still significantly higher than traditional markets).
Every resurgence of bitcoin in recent period, was met with the, for the most part, inability of altcoins to rally with it. Reason for that can be rookie investors learning from their mistakes, while smart money that was previously watching from the sidelines has begun to enter into bitcoin.
These entities weren’t about to buy BTC when it was trading at an all-time high, but they’ll take a look now, having missed the boat the first time around. None of them, it seems, are interested in altcoins however, despite the fact that many are trading at a 5x discount. Institutional investors may be cautious, but they’re not foolish.
Our ADA Price Prediction for 2019
ADA, as the rest of the market, is tied at the hip of bitcoin’s price action. If bitcoin embarks on another bull run, ADA can hope for one as well. Since that is very unlikely, don’t expect much to change for ADA price-wise in this year. So 2019 will be a year of boring sideways action with minor bitcoin ignited jumps and slumps.
The main currency in cryptocurrency markets is Bitcoin and given this, altcoins tend to fuel Bitcoin runs and Bitcoin tends to do the same in return. Given this relationship, Bitcoin price movements (or lack thereof) tend to effect altcoin prices.
When Bitcoin goes up swiftly, it will likely:
- Suppress or depress altcoins as money flows into Bitcoin;
- Or, take altcoins along for the ride
In cases when Bitcoin plunges, it will likely:
- Depress altcoins as money flows into fiat;
- Or, cause altcoins to boom as money flows into them, but this is rarely the case.
When Bitcoin moves sideways, it will likely:
- Cause altcoins to mimic that as traders wait for a clear sign on the direction of the market;
- Or, cause altcoins to flourish as traders look for returns in altcoins and try to get favorable trades in terms of BTC pairs.
ADA-BTC Price Correlation
The vast majority of trading that occurs in the crypto markets are between BTC and Altcoin trading pairs. Since most Altcoins do not pair with fiat currencies (and only a few are paired with stable coins like USTD), Bitcoin is the next best option. Therefore, when Bitcoin is stable, it forms as the ideal base currency for buying Altcoins (which is why Altcoins tend to do well when Bitcoin goes sideways).
Correlation is measured on a scale from -1 to 1. Values above 0 shows the degree to which altcoin is moving in the same direction as BTC prices (either up or down in tandem), and values below 0 shows the degree to which altcoin moves in the opposite direction of BTC prices (so when BTC goes down, altcoin goes up, or vice versa). Values around 0 shows that when BTC price moves, altcoins stays steady, or alternatively that when altcoin moves up or down that the BTC price is staying steady.
ADA has had a correlation coefficient of 0.90+ for the most of its market life, with occasional drop to zero territory mostly due to the fact ADA couldn’t follow suit bitcoin’s sudden jolts upwards; as shown on the image below – source.
To summarize, Bitcoin is the focal point of the crypto market in many ways, and with BTC trading pairs on every exchange, the gravity of Bitcoin is hard to evade.
The majority of projects will fail — some startups are created just to gather funds and disappear, some would not handle the competition, but most are just ideas that look good on paper, but in reality, are useless for the market.
Vitalik Buterin, co-founder of Ethereum said:
“There are some good ideas, there are a lot of very bad ideas, and there are a lot of very, very bad ideas, and quite a few scams as well”
As a result, over 95% of successful ICOs and cryptocurrency projects will fail and their investors will lose money. The other 5% of projects will become the new Apple, Google or Alibaba in the cryptoindustry. Will ADA be among those 5%?
Hard to tell but probability for that is fairly solid as ADA has built a reputation of an academic and serious project that might move slow, but radiates professionalism and instills trust in their hodlers. Charles Hoskinson is firmly maneuvering almost all aspects of the project: from the code development to business activities along with interacting with community and keeping them in the loop.
In 2019, ADA needs to make sure not to miss any deadlines (like they used to in the past) and deliver what they promise to keep their spot under the sun of crowded dapps platforms niche.
Considering Ethereum is still a hot mess with their complete system revamp going on, ADA has a unique opportunity to seize the throne from Ethereum and become the default dapps platform for the future.
Why will Cardano (ADA) succeed?
Cardano has a fantastic team of academics and developers from all over the world. The team is professional and work-focused, never discussing the price action of ADA token which is a good indication of correct attitude.
Cardano really focuses on scalability and sustainability. Currently, many blockchains require a copy of the entire blockchain while processing a transaction, which will slow down transaction time drastically as user adoption increases. Cardano aims to mitigate this scalability issue.
Bottom line, main pillars for Cardano’s bright future are its strong team, testing and verifying first approach to solving blockchain problems, strong community, good brand recognition and good liquidity.
Why will Cardano fail?
Small warchest to fund their roadmap, team fatigue or infights or rogue member that could disrupt the development are all possibilities that could lead to failure of any project, ADA included. However, the biggest threat to Cardano is one of their biggest advantages: their development philosophy. It could very well be that their slow and steady approach renders them obsolete if the competitors make breakthroughs in their technologies. Ethereum is moving fast and breaking (and fixing) things while ADA’s philosophy of “ounce of prevention is worth a pound of cure” is inherently lagging.
Can Cardano reach $1, $10 or $100?
Is Cardano (ADA) dead?
All of this summed up means one thing: ADA might live through couple of orchestrated and, for a regular trader, completely unpredictable pumps but the majority of time will be murky sideways trading with small volume and no significant interest from the market.
Price will heavily depend on what BTC will do and since many analysts think BTC will not be making big moves in this year, it is hard to expect ADA will do them either. The price will probably stagnate and record slow-moving depreciation or appreciation depending on the team activity, potential technological breakthrough or high-level partnership.
Market Prediction For Cardano Price 2019
With the market being completely unpredictable, forecasting the cryptocurrency price is really more of a gamble and luck rather than a data driven guesstimate.
Let’s throw a glance at the eminent publications and personalities, and their predictions regarding the Cardano (ADA) price, which will give us another point of view to consider:
Forecasting machine at WalletInvestor is spews out a not too optimistic forecast for ADA: in the last month of the year, Cardano price will be at $0.0172 according to this site.
Much more favorable stance towards ADA’s year has a prediction algo at cryptoground.com that sees ADA tripling its value to $0.13 by the end of the year.
Smartereum author Adam Web believes that the future of ADA is bright where he claimed that the one-year forecast for an ADA token is around $2.50, with the potential to reach roughly $10 in 5 years time.
Crypto town is a website which gives out technical analysis for short-term and long-term predictions for various cryptocurrencies. According to them, Cardano will increase by 200% in 2019 to that of the price achieved by the end of 2018, which will be roughly $0.06, which looks like a conservative prediction for ADA.
Cardano Price Prediction 2020, 2023, 2025
If everything goes well with their roadmap, Shelly and Goguen hit the ground running, ADA might see its ATH value from 2017 – meaning it could go above $1 again.
Provided it is still alive, ADA could be dominating the dapps platforms sector in cryptocurrencies. Hard to put a number behind it, but it is certainly plausible it reaches $5-10.
Similarly to 2023, if the platforms is actually functioning, Cardano could be dominating the dapps platforms sector in cryptocurrencies. Hard to put a number behind it, but it is certainly plausible it reaches $10+ per token.
Predicting prices of novel, highly volatile and risky asset classes is a thankless task – best answer is no one knows. Educated guess is that realistic ADA price for the foreseeable future is somewhere between its current price of below $0.10 and its all time high of $1.17.
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CaptainAltcoin’s writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner.
The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com