Cardano Price Prediction: Could ADA be the Next LUNA?
- Cardano price has been in a long bearish trend.
- There are serious concerns about its ecosystem.
- Analysts believe that it could be the next Terra LUNA
The Cardano price has staged a strong recovery after it plummeted to a multi-month low this week. ADA is trading at $0.5700, which is about 43% above the lowest level this week. As a result, its market cap has moved to about $19 billion, making it the 7th biggest cryptocurrency in the world. In its peak, Cardano had a market cap of over $91 billion.
Could ADA be the next LUNA?
Cardano is one of the biggest digital currencies in the world. Yet, a closer look at its ecosystem raises serious concerns about its price and valuation.
For starters, Cardano was created to be a a good alternative to Ethereum. It was created using proof-of-stake technology, meaning it was faster and significantly cheaper than Ethereum.
Unlike other newer coins, Cardano was actually launched in 2015, meaning that it has been around for more than 7 years.
Yet, as part of its roadmap, the platform accepted smart contracts in 2021. And since its launch, only a few apps have been launched into its ecosystem. According to DeFi Llama, the network has a total value locked of $124 million. MinSwap has a dominance of over 47%. In contrast, we have seen networks like Avalanche and Cronos launch and gain traction in less than two years.
To be sure, Cardano developers have insisted that there are over 1,000 apps being developed in its platform. And several Cardano trackers have identified many more applications in its ecosystem.
However, a closer look at some of these apps shows that they have little to no activity. Also, there is no guarantee that these applications will be successful eventually. Take a look at our review of eToro, the best platform to buy Cardano.
Regular readers know that I have been critical of Cardano for a while.
Now, with LUNA moving to obscurity, there is a likelihood that Cardano could be next. It has little network activity and MinSwap has a dominance of near 50%. Therefore, if it develops some weakness, there is a likelihood that contagion would move to Cardano’s ecosystem.
If you would like to learn more, you can read some of my previous articles on Cardano (ADA) price prediction:
Cardano price prediction
The daily chart shows that the ADA price is having a good day as investors buy the dip. The coin has moved below the important resistance level at $0.7513, which was the lowest level on February 24th. It has also formed what looks like a hammer pattern, signaling that there could be some more gains ahead.
If this happens, the next key resistance to watch will be at $0.7513. In the long term, however, the coin will likely keep falling. If you would like to find out more, check out our guide on how to invest in Cardano in 2022.