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Just a few days after the SEC’s lawsuit, ADA‘s price dropped from $0.37 to its lowest level in two years, $0.21, triggering a 42.5% fall. So, what are the expectations in the cryptocurrency?
ADA’s Downfall!
ADA faced further downward selling pressure due to being delisted from US-based trading applications Robinhood and eToro. However, the network is making progress with an increase in DeFi activity following a scalability upgrade in May. According to experts, the token’s technical and on-chain analysis also shows a positive recovery potential.
Over the years, Cardano has faced some criticism due to ongoing delays and network updates. In an interview, Cardano’s founder Charles Hoskinson admitted that 85% of the initial roadmap has been completed, attributing these hitches to “betting on the wrong technology and being a bit ambitious on the roadmap”.
However, the network recorded an increase in activity following the implementation of the long-awaited scalability upgrade Hydra, which was launched in the first week of May 2023. The total fees paid in Cardano rose to a year high after the upgrade, before crashing in the middle of the SEC’s lawsuit.
ADA Data!
Nevertheless, activity has been on a steady upward trend in the past few weeks. According to DeFiLlama data, the total ADA invested in DeFi applications on Cardano has risen strongly and reached twice the peak value in the 2021 bull market. Transaction volumes in Cardano’s DEXs have also recorded a significant increase since the Hydra upgrade in May.
Hydra is a Layer-2 scaling solution designed to increase the efficiency and scalability of the Cardano blockchain by processing transactions on a side chain. In addition, a Jarvis Labs report identified ADA as one of the “decentralized L1s” based on the Nakamoto coefficient, which measures the minimum number of assets that collectively control 33.33% of all cryptocurrencies staked on the network. Higher decentralization could potentially influence Cardano’s securities status in the US favorably.
