Cardano (ADA) is printing a fresh all-time high and is therefore right on trend. Besides the general bull sentiment, what’s behind the latest ADA rally?
A green wave has hit the crypto market: in the wake of the crypto flagship Bitcoin, the altcoins are also surfing to new record levels.
Right at the forefront: ADA, the native asset of the Cardano blockchain. At the beginning of the week, the ADA rate managed to crack the last stubborn resistance at 1.20 US dollars and thus end a week-long sideways trend. Now the signs are pointing to dark green at ADA: ADA has set a new all-time high at 1.52 US dollars. At the time of going to press, ADA was trading at $ 1.48, an increase of over 4,000 percent in one year.
What’s behind the Cardano rally?
First of all, what applies to all Altcoins applies to Cardano: If Bitcoin rises, its epigones usually also benefit from it. This correlation can be expressed in numbers, where the following applies: A value of 1 means that both courses are moving in lockstep. If the value is in the negative range, one speaks of a negative correlation. Here the courses move in opposite directions. Finally, a correlation of 0 means that two assets develop completely independently of one another.
Of the three “competing” networks Ethereum, Cardano, and Polkadot, the industry leader ETH has a strongly positive correlation to Bitcoin with 0.78. The price of Polkadot (DOT) also increasingly correlates with BTC. At the time of going to press, the value is 0.65.
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The correlation between Bitcoin and Cardano, on the other hand, has been on the decline since the end of 2020. The clearly recognizable jump from 0.2 to 0.36 within one day indicates that ADA has also benefited from the new BTC all-time high.
Cardano: Smart Contracts in the pipeline
However, the strong price development that ADA has shown in recent months is not only due to King Bitcoin. The Cardano project recently announced significant technological advances. In July 2020, Cardano carried out the Hard Fork Shelley, with which staking was transferred from ADA to the mainnet. Another update followed with Mary, which expanded the functionality of Cardano: Since the integration of Mary, it has been possible to store your own tokens directly on the Cardano blockchain without having to go through a smart contract, as is the case with Ethereum Case is.
Not that you have a choice: The Cardano network does not yet support smart contracts. However, this should change this year. The Cardano developers are currently working flat out on the next scheduled hard fork, Alonzo. A core component of Alonzo is the Plutus smart contract platform. With Plutus it is possible to create smart contracts and decentralized applications (dApps) for Cardano. The test network for Alonzo is scheduled to go live at the end of April. Alonzo is to be tested in the Testnet by the end of June. In August, the integration of Alonzo is Cardano’s mainnet is to take place and the project finally opens the door to the world of dApps and DeFi.
ADA-ETH bridge is just around the corner
However, ADA may find its way into the DeFi space much earlier, which Ethereum still dominates. The project Occam.fi is about to be published. Occam.fi calls itself the “Smart DeFi Layer” for Cardano. With OccamRazor, the Occam Cardano will bring a launchpad on which new Cardano projects can be financed via crowdfunding. The highlight: OccamRazor will also enable Ethereum users to invest in Cardano projects.
Occam’s cross-chain bridge is essential to providing adequate liquidity for these pools, which enables Ethereum users to fund projects that build on the Cardano blockchain and seamlessly move liquidity from Ethereum to the Cardano ecosystem. Projects launched via OccamRazer can use this cross-chain bridge, which gives projects launching on Cardano access to Ethereum’s user base and liquidity.
The countdown for the launch of Occam has started: the project is scheduled to start this afternoon (April 14, around 4:30 p.m.). Whether the project will actually succeed in tapping the Ethereum community on a large scale remains to be seen in the coming weeks and months.
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