ADA-USD: Cardano faces a watershed technical moment

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A healthy dose of skepticism – the basis of peer review – strengthens our understanding of difficult topics. Whether we ask critical questions about religion, as shown by the Pew Research Center which found that atheism is slowly but surely on the rise in the United States, or about cryptocurrencies, as gimbal (CCC:ADA-USD).

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When you look beyond the superficial reasons to consider ADA coins – their “cheap” price, the backing of popular figures – you will invariably encounter the main reason to put your dollars at risk: the protocol behind Cardano works via Proof of Stake ( point of sale). In short, the decentralized verification process that underpins virtually all blockchain-based networks emphasizes system stakes rather than raw computing power.

Many consider PoS to be the holy grail of large-scale cryptocurrency integration because the environmental impact of crypto mining tied to proof-of-work (PoW) protocols is onerous, especially when compared to cryptocurrency. Advantage: Crypto valuations can drop to zero and ADA is no different. However, at least Cardano will not impose such a large footprint on the environment as many other digital assets.

While an intriguing concept, the problem with Cardano and the legions of cryptos out there is the lack of correlation between positive fundamental sentiment and profitable technical trajectories. For example, Bitcoin (CCC:BTC-USD) is flying right now, about to reach and possibly break its all-time record.

On the other hand, Cardano is stuck in a consolidation pattern. Now, it is very possible that due to the triangular funnel nature of this consolidation, a breakout move will occur. But it’s also in my opinion a do-or-die moment.

All the good things people say about ADA won’t matter if they can’t deliver the benefit.

Cardano is a business, not a manifesto

When looking at various crypto-related services, you often hear encouragement to be your own banker. You may be surprised to learn that this concept is not new. Indeed, precious metal bulls have been supporting this thesis for years, if not decades.

Of course, I understand both points of view. Since fiat currencies tend to fluctuate with national and global economic conditions, there is some uncertainty built into the system. But by putting your money outside the system – be it gold, crypto or baseball cards – you become your own banker, I suppose.

But here is a question you should ask yourself before buying Cardano or any other crypto: is it really a good thing to be your own banker?

When you take a seemingly profound concept but juxtapose it with other circumstances, you can better see the viability or nuances of the original proposal. For example, you don’t see too many ads recommending people to be their own plumbers.

For example, I had a plumbing problem at home that I knew I could fix, but my wife insisted that I call a plumber. Of course, my ego wouldn’t allow such a thing and I ended up solving the problem on my own. However, it came at a high cost in wasted hours and sanity spent on rude talk.

So two lessons here: gentlemen, listen to your wives because sometimes they make sense. I mean, they make sense all the time, but you know what I mean. Number two, although you can do it (best said in a Rob Schneider voice), sometimes you probably shouldn’t.

Banking is one such discipline. It is difficult. That’s why you outsource this specialty and others to professionals.

Take a modest bet

Like a giant ship sinking upside down, I suppose it is theoretically possible for Cardano to be sucked in and out of its consolidation phase. Plus, the law of small numbers—the equivalent of putting your car in neutral while it’s being towed rather than starting it in gear—should help ADA’s cause.

Still, I would take a modest gamble because the fundamentals of blockchain technology will take many more years to really make a dent in mainstream society. As I illustrated above, the idea of ​​being your own banker is not appealing to the masses when you break it down. Additionally, Cardano’s smaller profile compared to Bitcoin makes the argument about its proof-of-stake protocol less compelling.

What we are left with is that the ADA is bolstered by speculation. This isn’t a bad thing per se, but you should be aware that like a sugar rush, crashing can be tough.

As of the date of publication, Josh Enomoto held a LONG position at ADA and BTC. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto helped negotiate major contracts with Fortune Global 500 companies. Over the past several years, he has provided critical and unique insights to the investment markets, as well as various other industries including law, construction management and healthcare.

The post ADA-USD: Cardano Faces a Decisive Technical Moment appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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