Cardano and the Crypto Winter 2.0: Is It Just Starting?

June 9, 2022 0 Comments

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Some people say yes, it has arrived; some others say no, it has not happened yet. The fact is that the term ‘crypto winter’ has been widely discussed during these times when the cryptocurrency market has been suffering a bloodbath in its price action across the board.

Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and the rest of the crypto sphere have been heavily hit by a strong selling wave as a result of a loss of steam in the market capitalization.

One of the most significant losers amongst the top cryptocurrencies by market cap is Cardano (ADA), which is currently hovering around $0.54. Its price action stood above $3.20 last year when it peaked.

Cardano (ADAUSD) – Weekly Chart

Since then, the price has been losing ground in an unstoppable fall that is far from being blocked by demand in the near term. Then, around March this year, the altcoin suffered another sell-off due to the bearish momentum that the cryptocurrency market had.

Now, eyes are on the floor established by Cardano around the zero area, with the first hurdle at around $0.20, which is ahead of such a critical psychological zone, with fears of more selling pressure coming in the near term.

According to the weekly chart, the RSI indicator is nearing the oversold territory, implying that a possible floor is coming. Still, questions about the crypto winter remain unanswered: has it already started? And if so, when will it end?

Likely a ‘Crypto Fall’

Neil Bergquist, CEO and Co-Founder of Coinme

Neil Bergquist, the CEO and Co-Founder of Coinme, told Finance Magnates that we are likely in a ‘crypto fall’ rather than a crypto winter. “With that said, the flowers will bloom again, and there should be higher valuations in the future, and everyone will wish they had purchased more when fear was heightened. It’s important to remember that we’re still in the early days of crypto adoption, and billions of dollars are being poured into building crypto-based experiences that will substantially increase global utilization,” he commented.

Additionally, Bergquist talked about transitioning to a bear market as, according to him, we are currently witnessing a sideways stage across the crypto sphere. “As we transition to a bear market, I believe that BTC, which currently represents about 45% of the total crypto market cap, will help lead the crypto recovery, along with Ethereum as ETH2.0 gains public favor this summer. The general public will become more aware of the difference between proof-of-work and proof-of-stake, and many will see proof-of-stake as the future. Generally, altcoins tend to be more volatile than the large-cap cryptos, and during this recent sell-off, we saw them take the biggest percentage [in] losses. In all market conditions, it’s always best to take a balanced, long-term approach and dollar cost average of your purchases.”

It’s Here…

Daniel Polotsky, Founder and Chairman at CoinFlip

However, speaking with Finance Magnates, Daniel Polotsky, the Founder and Chairman at CoinFlip, believes that the crypto winter is already here after Bitcoin dropped over 50% in its price from its all-time high of nearly $70,000 in November.

“However, it is important to keep in mind that large traditional finance institutions are also down 70-80%+ from their all-time highs. Historically, when we’ve seen cryptocurrency dip the economy has been strong. Now, in an economy that faces uncertainty, it’s actually showing resilience by comparison,” Polotsky said.

He added: “As of now, cryptocurrency bull and bear markets are indeed cyclical. They have typically revolved around the Bitcoin Halving, an event that takes place roughly every four years. During each halving, the block reward for mining a block of Bitcoin gets cut in half, meaning that the supply of new Bitcoin emissions is lowered, while demand remains the same.”

Moreover, Polotsky talked about projects like Uniswap, and how they were born during the crypto winter, as he argues that such a stage of the cryptocurrency market provides a ‘great opportunity for investors’ to accumulate cryptos at bargain-level prices.

“Projects like Uniswap began during [the] crypto winter, and plenty of massive companies such as Microsoft were born during recessions; building a fundamentally sound project or business will always triumph over hype in the long run. Even though Bitcoin and cryptocurrency are cyclical in nature, the highs and lows of each cycle have been higher than the previous one as the space continues to gain trust and utility.”

Furthermore, the CEO and Co-Founder of Coinme clarified that trying to time the market can be ‘risky’ and emotionally taxing and asked to exercise caution during such times.

This article was written by Felipe Erazo at www.financemagnates.com.

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