Ana Sayfa Genel Cardano price turns bullish, but is there substance to the ADA rally?

Cardano price turns bullish, but is there substance to the ADA rally?

Cardano price turns bullish, but is there substance to the ADA rally?

Cardano experienced a remarkable price surge of 23.9% on July 13, leaving investors curious about the potential for further gains. This significant rally comes on the heels of a favorable judicial decision regarding XRP (XRP), leading many to question if Cardano (ADA) has what it takes to break above the $0.40 mark.Cardano 1-day price in USD at Coinbase. Source: TradingViewThere are three reasons to support Cardano’s bullish momentum, including its potential to integrate other blockchains, increased activity in decentralized applications (DApps) and the decreased regulatory risk, although the latest XRP event requires a more cautious approach.SEC actions specifically named ADA as a potential securityCardano and its ADA token found itself in the spotlight as the United States Securities and Exchange Commission (SEC) referred to it as a potential security during the recent court actions against the Coinbase and Binance exchanges. However, it’s important to distinguish that while the staking offering may be considered a security, it does not pose a direct risk to Cardano or its development companies. Following the SEC’s remarks in June, ADA faced a 36% correction, dropping to $0.24. However, the XRP ruling on July 13 helped alleviate regulatory risks, leading to a boost in the rally of ADA and other coins impacted by the regulator’s comments.The idea of implementing sidechains sparked additional interestAfter a recent video shared by John Woods, chief technology officer at the Algorand Foundation, Charles Hoskinson, founder of Cardano, proposed incorporating Algorand (ALGO) as a Cardano sidechain. It might be prudent for Algorand to consider becoming a sidechain of Cardano. Always here to help.— Charles Hoskinson (@IOHK_Charles) July 12, 2023

Although it may seem unlikely for the Algorand community to accept such a suggestion, the proposal gains relevance amid AlgoFi’s shutdown announcement on July 11. The decision followed the SEC’s allegations of security-like characteristics against Algorand due to its initial coin offering (ICO). This could provide a way for Algorand to avoid regulatory scrutiny, and it could also boost the adoption of Cardano’s ecosystem.It’s worth noting that smaller altcoins could be incentivized monetarily to become a Cardano sidechain, leveraging Cardano’s rich treasury and marketing potential.Increased activity in Cardano DApps and NFT marketsSmart contract activity plays a vital role in the success of blockchains designed for DApps, especially as Ethereum struggles with soaring transaction fees. Therefore, assessing ADA’s activity in terms of deposits locked on smart contracts and the number of DApp users becomes crucial in determining the sustainability of the current bull run. Cardano smart contracts TVL, in ADA terms. Source: DefiLlamaAccording to DefiLlama, Cardano’s total value locked (TVL) in ADA terms increased by 10% month-on-month, reaching 550 million ADA on July 14. Additionally, decentralized exchange volumes saw a 6% increase over the past seven days. Cardano’s nonfungible token sales, as reported by CryptoSlam, surged by 56% to $3.1 million, outperforming leading platforms like Solana and Ethereum.Data sounds promising, but ADA could still face regulatory setbacksThe recent rally in ADA is certainly encouraging, but there are still some risks to consider before investing in the project.Despite the beneficial XRP decision, it’s important to note that Cardano’s ICO was not explicitly cleared by the court ruling, as it solely addressed sales via exchanges and over-the-counter desks. The ongoing XRP trial will further determine the fate of Cardano’s regulatory status. Related: Can XRP price hit $1? Watch these levels nextAdditionally, ADA’s TVL of $200 million lags behind other layer-1 smart contract alternatives such as Tron ($5.9 billion), BNB Smart Chain ($3.4 billion) and Avalanche ($727 million). This suggests that there is still limited demand for ADA’s services.To solidify its position and potentially surpass the $0.40 mark, Cardano needs to continue growing and delivering on its promises, including the planned updates for 2023. Important upcoming updates include the Hydra L2 solution that uses sidechains to offload transactions from the main chain and Basho, an L1 scalability and performance improvement proposal for improved block structure, parallelization and pipelining.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.


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