Cardano witnesses surge in development, can ADA price follow?

Cardano witnesses surge in development, can ADA price follow?

Cardano (ADA): Is the Downward Trend Reversible?

Cardano (ADA) has been undergoing a persistent downside trend since the beginning of 2023, and the selling pressure has escalated in recent weeks. However, despite the declining prices, the development of the Cardano network continues to expand, potentially hinting at a reversal for the cryptocurrency.

As of now, Cardano (ADA) is trading at $0.24, showcasing sideways movement in its weekend price action. Over the past seven days, the cryptocurrency has recorded a 4% loss, with the possibility of further declines if the price of Bitcoin remains on its current trajectory.

ADA’s price trends to the downside on the daily chart. Source: ADAUSDT on Tradingview

Cardano Price Bound for a Change in Trajectory?

Despite the pessimistic price movement, data provided by Cardano’s leading developer, Input Output Global (IOG), reveals a different story. Network activity on Cardano has been steadily increasing, with 75.3 million transactions processed, 79,182 token policies established, and over 1,250 projects currently being built on the network.

Analysis from IOG further illustrates this growth, showing that 144 projects have been launched on Cardano, resulting in the creation of over 8.8 million tokens. This development surge demonstrates the significant progress made in implementing smart contract capabilities through the highly anticipated Hard Fork Combinator event called “Alonzo.”

In addition to this milestone, IOG is continuously working on launching other core improvements to Cardano. Among these enhancements is a fix for the consensus algorithm, aimed at improving performance and scalability. Furthermore, IOG is actively developing their smart contract platform, Plutus, and the native crypto wallet, Lace.

The introduction of Hydra, focused on enhancing scalability, and Mithril are also significant upcoming events for the Cardano blockchain. IOG highlights advancements made in these projects, specifically addressing the optimization of aggregator performance bottlenecks caused by high client traffic and the creation of a new distribution.

Source: IOG

However, an alternative perspective is provided by TokenTerminal, a crypto analytics firm. According to their data, Cardano has experienced a 6% decrease in its circulating market cap and a 35% loss in annualized fees. Although the number of developers working on the network has increased by around 6%, the number of core commits has declined by 29% in the past 30 days.

Number of core commits on Cardano has been decreasing over the past year. Source: Token Terminal

It is worth noting that the correlation between the number of commits to the project and the price of ADA has been weakening, although the token has shown some positive price action following an increase in the former metric.

The current market conditions leave Cardano investors and enthusiasts questioning whether the ongoing developments and network growth will be sufficient to reverse the downward trend. While the data from IOG portrays a promising future for Cardano, TokenTerminal’s insights suggest additional factors that could impact ADA’s price trajectory.

In conclusion, Cardano’s network development continues to progress despite the downward trend in prices. The introduction of important projects, along with significant improvements to performance and scalability, indicates a positive outlook for the cryptocurrency. However, it is essential to consider various perspectives and keep a close eye on market trends to fully assess Cardano’s potential for a trend reversal.