Expert: Any move in Cardano may depend on the price action in Bitcoin
At the time of publication, Bitcoin was trading for $46,220, not far from its 200-day moving average of just under $46,000. After the flash crash on Tuesday, the biggest cryptocurrency has been at around that level.
Alonzo upgrade taking place this Sunday
Sunday, September 12 is a key date in the world of cryptocurrencies. That’s when Cardano’s Alonzo Purple upgrade is scheduled to take place, enabling smart contracts on the network. Cardano developer IOHK tweeted:
“The Alonzo HFC event will be the most significant upgrade yet, laying the firmest of foundations for an exciting new era of smart contracts on Cardano.”
Alonzo will bring DeFi applications and exchanges to the ecosystem. As a result, Cardano will begin to compete with Solana, Ethereum, and other similar networks. After the upgrade, it will also be possible to mint non-fungible tokens (NFTs) on the Cardano blockchain.
Not everyone is as excited about the upgrade as the developers. Some investors fear that the price of Cardano might drop after the upgrade takes place, after a solid series of gains in recent weeks. So solid, in fact, that Cardano reached third position by market cap. Financial analyst Robert Zach believes Bitcoin price action could be behind any move in Cardano:
“Whether Cardano will rise with the smart contract integration depends to a large extent on whether Bitcoin can hold above the 200-day line. If the mother of all cryptocurrencies gives away this significant support level, it does not look good for Cardano in the short term either; after all, Bitcoin is considered a proxy for the entire crypto market. To regain momentum to the upside, it is necessary to at least recapture the lower edge of the ascending triangle at $2.90.”
SEC postpones decision on VanEck’s Bitcoin ETF
Earlier this week, the US Securities and Exchange Commission (SEC) announced they would postpone their decision on VanEck’s Bitcoin ETF until November 14. The fund is marketed as an actively managed ETF with exposure to Bitcoin investment products such as futures. According to their extension notice, they find it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change.
Approval is tantamount to another bull run
If the SEC approves the ETF, it may generate anther Bitcoin bull run because people won’t need to hold crypto directly to get exposure to it.