Cardano is a flexible, sustainable blockchain that aims to be the next generation of Ethereum. It enables an opportunity to develop a wide range of decentralized apps, new tokens, and games on its platform. Like Ethereum native coin ETH, investors use the ADA (Cardano) as a store of value and buy/sell it on the exchanges. It is also used to send and receive payments and pay transaction fees on the network.
It was created by the Co-founder of the Ethereum cryptocurrency, Charles Hoskinson. He aimed to make it a third-generation blockchain. Bitcoin is the first generation, and Ethereum is the second generation of blockchain. The goal is to create a scalable, faster, and energy-efficient decentralized platform. It uses proof of stake consensus, which is energy efficient, and used in popular cryptocurrencies such as Bitcoin and Ethereum.
Cardano is divided into two layers:
Cardano Settlement Layer (CSL): It stores the ledger of accounts and balances.
Cardano Computing Layer (CCL): Here, all the computations for apps on the blockchain are executed.
This split helps the network to process a large number of transactions within a few seconds. In March 2021, Cardano introduced new features to create native tokens like NFTs or stable coins like USD coins, and it skyrocketed the price.
At the time of writing this analysis, the price of ADA is trading at $0.81. After reaching an all-time high of $3.07, it has been in a downtrend since September. Will Cardano give a good return this year? To find the answer, we have to analyze the daily and weekly charts.
On the daily chart, ADA has broken the strong support level of $1. That means most of the indicators are bearish. The MACD is neutral, and the RSI is below 40. Candlesticks are forming in the lower half of the Bollinger Band, which suggests short-term bearishness. However, it is hard to tell when it will bounce back.
Considering the long-term view or weekly chart, we find higher highs and higher lows. After that, a sudden downtrend from the second half of last year and it shows long-term bearishness. Most of the popular indicators such as MACD, RSI, and Bollinger Band reflect bearishness.
Should you invest in ADA? We do not think it is the ideal time for investment because it has broken the strong support level. It is tough to identify the next support level, and it can be $0.39, which is much lower than the current price. We think it is time to wait and watch until it crosses the level of $1.10. Indeed, Cardano is a popular cryptocurrency, and it will bounce back sooner or later.
