The cardano price has exploded this week ahead of the release of an updated development roadmap, but many investors fear that its release will trigger a liquidation event.
As CCN reported, cardano stormed to the ninth spot in the market cap rankings on the heels of a rally that saw the price of the ADA cryptocurrency increase fourfold. At one point, cardano was up 400% for the week, but its price took a hit in conjunction with the comprehensive market downturn. At present, the cardano price is $0.114, which translates into a $2.96 billion market cap.
Two main factors appear to be fueling cardano’s rapid ascent. First, the coin has seen increased support from cryptocurrency exchanges. Bittrex added an ETH/ADA trading pair, increasing cardano’s potential liquidity. Binance added ADA to its platform on Thursday, providing cardano with more exposure to the Asian markets, which often price coins above their global averages.
Second, the cryptocurrency’s developers had teased the release of an updated roadmap. Cardano development is headed by IOHK, whose CEO — Charles Hoskinson — briefly led the ethereum project for six months during 2013 and 2014. Consequently, many investors believe that this coin has strong potential over the long-term. The roadmap was scheduled to be released Thursday evening, at midnight UTC, and the cardano price rose in the hours leading up to this publication.
However, anyone who has spent much time observing the altcoin markets has seen this movie before. The markets are prone to price in potential announcements that almost-inevitably fail to live up to the hype, leading liquidation events.
This scenario played out earlier this year in the XRP markets. The XRP price soared when Ripple teased details about their October conference but took a dive when the conference announcement turned out to be — wait for it — just a conference announcement. The cycle repeated itself when the conference arrived: the price soared in advance of the event but petered in its wake.
That’s not to say that cardano will necessarily chart the same course, but some ADA investors are preparing for a dump. Unfortunately, the reality of protocol development almost never competes with the hype that investors concoct in their imaginations.
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Last modified: May 20, 2020 9:18 PM UTC