Why Cardano could drop to 400 sats in Q4
- ADA showed signs of weakness and may not outperform BTC.
- While Cardano’s market cap decreased, the number of token holders increased.
Cardano’s [ADA] woes may not end anytime soon, based on a recent opinion made by Into the Cryptoverse CEO Benjamin Cowen. According to Cowen, ADA’s performance against Bitcoin [BTC] could drop to 400 satoshi in the coming months.
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Lower highs suggest a lower price
Cowen came to the conclusion after sharing an ADA/BTC chart, where he showed that the altcoin may not be able to hold on to the 800 to 1200 satoshi it had maintained this cycle.
— Benjamin Cowen (@intocryptoverse) September 21, 2023
The analyst’s projection could also be backed by the individual performances of both cryptocurrencies. In the last 365 days, ADA has lost 46.58% of its value. Bitcoin, on the other hand, has gained 37.84% within the same period.
When asked about the grounds for his prediction, Cowen said altcoins would mostly oscillate over the next quarter and Cardano would not be left out. He also opined that ADA was very weak technically since it put in a lower high in the last few months.
“Well, ADA/BTC also put in a lower high this cycle. Not exactly screaming strength.”
Since the king isn’t ready to leave the throne…
Another reason Cowen’s opinion could be valid is Bitcoin’s dominance against other altcoins. A coin’s dominance is a ratio of its market cap to the cumulative market cap of cryptocurrencies.
As a great way to see how big a coin is relative to the whole crypto market, a relatively high Bitcoin dominance places the coin with more potential to outperform the rest of the market.
At the time of writing, Bitcoin’s dominance was 50.13, meaning other altcoins like ADA have more work to do if they were to outperform the king coin.
Furthermore, Cardano’s market cap has significantly decreased in the last three months. According to Santiment, the market cap, which was $12.60 billion on 14 July, was down to $8.60 billion at press time.
This fall is confirmation of ADA’s underwhelming performance and reduction in circulation. The on-chain analytic platform also showed that ADA’s 30-day circulation had dropped to 2.37 billion.
The decrease in circulation means the number of ADA being used was not impressive. On the positive side, the circulation also means ADA may evade short-term sell pressure.
Read Cardano’s [ADA] Price Prediction 2023-2024
Irrespective of ADA’s lackluster performance, the altcoin still recorded an increase in the number of holders. As of this writing, the total number of ADA holders has increased to 4.47 million.However, the rise in holders may not be for the short term. Rather, it is possible that new addresses are adding the altcoin to their portfolio with the sentiment that it’s trading at a discount. Also, the likely plan for these holders may be to keep ADA for the long term.