Mid May Update: Technicals

ADA had a tough April and begining of May – it dropped through the ascending trendline that acted as the support and then penetrated another horizontal support line at 1087 satoshis, a strong zone formed back in January 2019, defended and used as the rebound area on multiple ocassions in January and March.

The question for all the traders was: where is the floor and rebound zone. If ADA dropped andfailed to bounce off of 866 sats zone, it would inevitably be heading into all time lows.

But it is a different story in the last couple of days. On May 11th, altcoins flinched a bit but then died down for a day or two and it seems we are seeing their resurgence today again.

Market usually behaves in this fashion: bitcoin consolidates after a pump giving up the floor to big cap altcoins to pump. So ADA should be among the first tier of altcoins that will see some gains should this scenario play out.

On the short timeframe of 4H, there is a lot of going on. You can see that ADA formed a meek bottom at around 960 sats after bottoming on that height for 4 consecutive candles. First obstacle ADA needs to overcome is the EMA50 line – a possible pullback there could play out like charted below:

So, ADA needs to reclaim two important former support zones (1080 and 1262 sats) before we can definitely call it a bull trend for Cardano.

Should the volume keep picking up, as it does right now – ADA might reclaim its ascending uptrend line at 1325 sats it formed back in December. You can see that ADA was respecting that line up until May 3rd when it dropped below and is now fighting to claw back up.

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, especially in the initial phases of bitcoin pumps. So it is always 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.

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.

Below is our long-term forecast where we cover general market movements and sentiment shifts before delving deeper into the specific predictions for ADA.

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.

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:

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.

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.

Tron – TRX: Price Forecast for 2019

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.

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:

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 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.

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.

Read also: Stellar XLM Price Prediction for 2019

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.

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.

In general:

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:

In cases when Bitcoin plunges, it will likely:

When Bitcoin moves sideways, it will likely:

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.

So what can cause ADA to rise and go up in price?

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.

Cardano could also end up being one big nothing but we see low probability for that to happen.

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.

Reaching $1 is in realm of possibility especially if we know ADA already was on those highs – its ATH is $1.33. However, getting to the $10 or eve $100 is a lot less likely, just take a look at the numbers: for ADA to reach $10, it would mean it has to grow 125x and have a market cap of $262 billion. If we assume that ADA/BTC price ratio stays the same, that would mean bitcoin would be $650k and have a market cap of $11.5 trillion. A bit too dreamy, isn’t it?

No, judging by the team activity on social media, github, their own website. Their communities on Reddit and Telegram are also active, although much lower engagement levels are noticeable when compared to 2017. Coin is also still listed on all major exchanges which indicates that ADA is far from a dead project.

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.

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.

The post Cardano (ADA) Price Analysis and Prediction for 2019 – Time To Reclaim The Lost Ground (Mid May Update) appeared first on CaptainAltcoin.

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