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The argument fronted by a renowned cryptocurrency analyst is that Cardano, the smart contracts platform that will compete with Ethereum promising a high throughput and scalability, is overvalued. At press time, its native currency, ADA, has a market cap of $934 million from a circulating supply of 25.927 billion. The Proof-of-Stake consensus-based platform is founded on scientific peer-review and thorough quality control checks of its code with Charles Hoskinson, one of the six original co-founders of Ethereum, as its technical leader.

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Altcoins are Products of the 2017 ICO Boom

The analyst’s argument is not really the first. Borne out of the ICO boom of late 2017, most blockchain projects struggle to attract usage even after raising millions. Even without a minimum viable product and shifting roadmaps, investors, nonetheless, continue to pour their hard-earned capital to these projects in their millions. For this, the analyst is calling for caution and due diligence.

For good reasons. There are perhaps of thousands of projects that find themselves struggling financially and despite their grand promises, are yet to come through, launching services and products. The situation was further exacerbated by the punishing cryptocurrency winter of 2018 when prices of tokens and coins plunged, with some losing as much as 99% of their previous market prices.

With a price depression biting months after 2017 peaks, projects are literally struggling, and most have folded. Meanwhile, regulators are on their back, urging them to either return funds to investors or pay heavy fines for selling unregistered securities. Most tokens dispensed via smart contracting platforms such as Ethereum or Waves, are considered securities by the US Securities and Exchange Commission (SEC).

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Cardano Development Delays

Although supporters of Cardano came out strongly against this view, there have been times when the project disappointed investors. The transition from Byron to Shelly phases was marked by delays. In October 2018, IOHK, the development wing of Cardano, pushed back Shelly Testnet deployment.

Last week, Cardano completed the ADA snapshots of coin balances held at their official wallets, Daedalus and Yoroi, in readiness for an incentivized Testnet. Balances will operate a staking pool from where coin owners can earn rewards.

Summary

Is Cardano (ADA) Overvalued: Analyst Weighs in

Article Name

Is Cardano (ADA) Overvalued: Analyst Weighs in

Description

The argument fronted by a renowned cryptocurrency analyst is that Cardano, the smart contracting platform that competes with Ethereum, is overvalued.

Author

Dalmas Ngetich

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CoinGape

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cryptocoach

Coingape is committed to following the highest standards of journalism, and therefore, it abides by a strict editorial policy. While CoinGape takes all the measures to ensure that the facts presented in its news articles are accurate.

Disclaimer
The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.



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Dalmas Ngetich , 2019-12-02 12:51:05 ,

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.


While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock


Nick Chong , 2019-11-10 12:00:38

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