Cardano’s native token, ADA, has experienced a significant decline of over 90% since September 2021, leading some to question whether the activation of smart contracts on the Cardano network is to blame. At its peak during the bull run of 2020 to 2021, ADA reached $3 in August, but has since fallen to $0.32, with support at $0.30. This downward trend, exacerbated by the 2022 crypto winter, has left investors who bought in August 2021 at a loss.
The activation of the Alonzo hard fork and the introduction of smart contracts marked a crucial milestone for Cardano, allowing developers to deploy dApps and compete with Ethereum. Despite accusations of delays and excessive spending during the development process, Cardano has continued to grow its ecosystem, with over $177 million in assets locked in DeFi protocols on the network.
However, the current disparity between ADA’s valuation and the expectations of coin holders post-Goguen phase is a cause for concern. As Cardano moves into the Voltaire phase, which aims to decentralize governance and provide more utility to ADA holders through voting on proposals and funding projects, it remains to be seen whether this transition will bring about positive changes for the token.
In the meantime, ADA faces significant selling pressure and could potentially drop to lows of $0.22 if buyers do not intervene. However, if the price surpasses $0.50, bullish sentiment may drive ADA towards its previous highs in March 2024.