It’s a mixed bag this week. Things went from bad to absolutely crazy when Silvergate Bank collapsed. Its fall, not to mention the meltdown of Silicon Valley Bank (SVB), ignited massive sell-offs that affected BlockFi, 16AZ and Circle, among numerous others. Cardano’s founder also took a jab at the NFT NYC organizers. $ADA trading volume dropped by over 30% and despite struggling, its price finally reached $0.34.

Keep reading for our $ADA price predictions!

TLDR

• Cardano is a third-generation blockchain designed to be a cheaper, more sustainable alternative to Bitcoin and Ethereum.
• Its native token $ADA has been on a downtrend since February, with buy pressure only occurring after the recent string of crypto-related bank collapses.
• Until the crypto market stabilises, sell pressure could see $ADA go higher if it breaks past the $0.34 resistance in the coming week.
• Despite the stablecoin sector drama, the Cardano-based algorithmic stablecoin $DJED has gained against $USDC, $USDT and others. This indicates a fresh burst of buy momentum may be near.

Disclaimer: Not financial nor investment advice. Any capital-related decisions you make are your responsibility and yours only.

POV: The dip keeps dipping!

After relatively bullish price movements at the start of 2023, the crypto market's momentum imploded just weeks before the end of Q1. $BTC and $ETH fell 8% and 4%, respectively, in reaction to the multiple crypto-affiliated bank collapses, which took with them the entire crypto market. $ADA was no exception, as traders intensified sell pressure to cut their losses ahead of possible price drops. 

The SVB collapse is the second-largest in US banking history (only behind Washington Mutual in the 2008 crash) and its repercussions are starting to manifest. For now, the stablecoin sector is the most affected. Circle’s $USDC de-pegged after the company announced losses of over $40B in reserves tied up with SVB. At the time of this writing, nearly all top stablecoins were trading below $1 due to that de-pegging. Tether ($USDT) is one of the exceptions, alongside Cardano's algorithmically backed $DJED. 

Aside from over  $246M in liquidations reported by Coin Glass, the mass stablecoin de-pegging also caused one unlucky trader to lose  $2M to an MEV bot for making a catastrophic mistake in light of the SVB news. 

This crisis serves as an effective test for Cardano’s $DJED. Barely a month old, it was designed to perpetually peg itself to the USD using smart contracts. It has performed so well, and has proven so resilient, that it currently trades at a premium above the rest of the stablecoin market, including $USDT. 

This string of collapses could cause regulators to hold crypto-related innovations to a much higher standard in relation to banking. This seems counterproductive, however, considering these banks crashed because of their ties with FTX and the legacy practices that they engaged. But that’s just how the cookie crumbles. Stiffer regulations are now inevitable, as regulators will not hesitate to tighten the noose. 

Along with plans from the Federal Deposit Insurance Corporation (FDIC) to mitigate losses from the SVB collapse, Circle released a statement promising the $USDC peg would be reset 1:1 to the USD by Monday the 13th of March. And it was. 

Cardano news

Initially dubbed the “$ETH killer”, Cardano was designed as a more sustainable alternative to the Ethereum blockchain but it (Cardano) fell short on its promise over the years due to ongoing development. As part of its roadmap, Cardano implemented its SECP upgrade in February to optimise cross-chain interoperability on the network and simplify the development process. The upgrade was so successful it attracted considerable developer traffic, and now over 1,000 dApps are being built on the network. 

While the number of daily active users has dwindled to 52K in contrast to developer activity, the total value of Cardano’s NFT marketplace CNFT has surprisingly reached just over $200M at the time of writing, a 44% improvement from late last year. 

However, organisers of NFT NYC stated that they didn’t prioritise the Cardano community at their annual conference, citing a lack of interest in Cardano NFTs. After much outcry, the organisers rescinded this position with an apology but that didn't save them from Cardano CEO Charles Hoskinson’s sarcasm.

At the time of writing, $ADA’s daily trading volume climbed to $450M, up 20% since February, as news of the $DJED dominance attracted a fresh batch of trader enthusiasm. Good publicity is great publicity and in the face of collective adversity, the Cardano network has triumphed by every measure. This pushed $ADA up to $0.34. Whether or not this momentum will be sustained and cause $ADA to continue its upward climb towards $1 is dependent on what occurs in the coming days.  

Market analysis 

Launched in 2017, Cardano is one of the crypto old guards. $ADA briefly peaked at $3 in 2021 but lost 90% of its value in the great crypto winter that followed. That the token managed to retain its relatively large $11B market valuation can only be linked to its strong community, dogged holders, and a number of big-name investors including the United Nations, The World Economic Forum, and the Ethiopian government.

The token is primed for a makeover. Thanks to a variety of factors (most notable being $DJED’s success), $ADA has displayed upward trajectory as capital floods the network.

Its price is currently balanced between $0.33 - $0.34, with $450M in daily trading volume, and may climb much higher if volume continues to build.  

HODL or trade $ADA?

$ADA exhibited multiple bearish signals last week, including an actual dip to $0.30 in reaction to the SVB news. The token promptly climbed to $0.34 when traders flooded the markets to capitalize on low prices and volatility. At this moment it is moving with Bitcoin and should see a rise if BTC breaks past the current range. 

While this may spell a golden opportunity, a reversal is not impossible, especially given the fact the market has not fully reacted to the SVB situation. 

Until then, trade with caution and expect positive price action if $ADA converts $0.35 levels to support.

(If you’re new to trading, we’ve got you covered in our Technical analysis guide.)

Cryptonary’s take

$ADA presents a promising investment opportunity for traders and HODLers seeking  exposure. All signs indicate that Cardano is finally making good on its initial promise of delivering scalable, secure, and efficient transactions after six long years.

The current volatility also makes it very inviting for traders to swing in and make short-term profits before the situation stabilises. While this upward trend may be sustained if assets like $BTC go up, caution is still necessary as repercussions from the bank collapses may continue to manifest.