The cryptocurrency market experienced a strong rally yesterday, with Bitcoin breaking above $66,000 and many altcoins like Cardano (ADA) also posting solid gains. Despite this bullish price action that has been long awaited, some people have expressed concerns about ADA moving slower than other assets. However, there are specific reasons for ADA’s current price behavior that provide important context.
ADA’s price action is normal given current market conditions
While ADA did see a slight pullback today as Bitcoin retraced, its overall price action remains healthy. As the host explains, “Ada is performing fine… we’re still at this point where we haven’t seen this inflow of outside capital in the market.” Most of the recent buying has come from capital already within the crypto space rotating back into the market, rather than significant new money entering.
ADA tends to perform best when fresh capital is flowing into crypto from the outside. The host notes that in prior rallies like in March and October 2020, “New Capital was entering the space… that is when a is going to perform it’s best.” Without those inflows currently, ADA is behaving normally by not surging as much as assets with larger trading pairs to Bitcoin and Ethereum.
ADA/BTC chart shows ADA steadily gaining on Bitcoin
Looking at the ADA/BTC trading pair provides a clearer picture of ADA’s performance. This chart shows ADA has been in a steady uptrend against Bitcoin since June. “We’re still just following this trend guys,” the host points out. “Just test test test test test test test AA waiting for that moment where it’s really going to take a lot of ground versus BTC.”
So while ADA may not be surging in dollar terms currently, it continues to steadily gain value relative to the market leader Bitcoin. This positions ADA well for eventual outperformance once new retail money starts entering the crypto space again in earnest.
Fundamentals and sustainability matter most, price will follow
Ultimately, the host emphasizes that price action is a secondary concern compared to the underlying technology and fundamentals. He argues, “there will come a point where price is the least of our concerns, where the market is pumping, where a is doing well… but the thing that you need to have then is good fundamentals. You have to have good Tech, you have to basically have a product that can sustain the inflows of new users.”
In his view, Cardano is one of the few blockchains truly prepared to handle mass adoption from a technical perspective. “Price is the lagging metric,” he explains. “Price is the thing that will come if you have a product that is sustainable, that is following through, is being built in a way that can Outlast, you’re going to be fine.”
So while it’s natural to focus on short-term price action, the most important thing is having solid fundamentals and technology that can sustain growth for the long run. And on that front, the host believes Cardano is well positioned to thrive as crypto adoption continues expanding in the years ahead.