Why Cardano was able to drop to 400 sats in the fourth quarter

Posted: September 23, 2023

• ADA showed signs of weakness and may not outperform BTC.
• While Cardano’s market capitalization decreased, the number of token holders increased.

Cardanos [ADA] The misery may not end anytime soon, based on a recent opinion from Benjamin Cowen, CEO of Into the Cryptoverse. According to Cowen, ADA’s performance compared to Bitcoin [BTC] could drop to 400 satoshi in the coming months.

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Lower highs indicate a lower price

Cowen came to the conclusion after sharing an ADA/BTC chart showing that the altcoin might not be able to hold the 800 to 1200 satoshis he had. to maintain this cycle.

After spending the summer in the 800-1200 sat range, #ADA / #BTC will likely drop to 400 sats in the coming months pic.twitter.com/AG6m5e4OcE

— Benjamin Cowen (@intocryptoverse) September 21, 2023

The analyst’s projection could also be supported by the individual performance of both cryptocurrencies. In the last 365 days, ADA has lost 46.58% of its value. Bitcoin, on the other hand, has risen 37.84% over the same period.

When asked about the reasons for him predictionCowen said that altcoins will largely fluctuate in the coming quarter and that Cardano would not be left out of the equation. He also believed that the ADA was technically very weak as it had set a lower high in recent months.

Cowen said:

“Well, ADA/BTC has also set a lower high this cycle. Not exactly screaming power.”

Because the king is not ready to leave the throne yet…

Another reason why Cowen’s opinion could be valid is Bitcoin’s dominance over other altcoins. A coin’s dominance is the ratio of its market capitalization to the cumulative market capitalization of cryptocurrencies.

As a great way to see how big a coin is relative to the entire crypto market, relatively high Bitcoin dominance means the coin has more potential to outperform the rest of the market.

At the time of writing, Bitcoin’s dominance was 50.13, meaning other altcoins like ADA have more work to do if they were to outperform the king coin.

Source: TradingView

Moreover, Cardano’s market capitalization has increased significantly decreased in the past three months. According to Santiment, its market capitalization, which stood at $12.60 billion on July 14, had fallen to $8.60 billion at the time of writing.

This fall is the confirmation of ADAs disappointing performance and reduction in blood circulation. The on-chain analytics platform also showed that ADA’s 30-day circulation had fallen to 2.37 billion.

Source: Santiment

The decrease in circulation means that the number of ADA used was not impressive. On the plus side, the circulation also means ADA can sidestep short-term sales pressure.

Read Cardanos [ADA] Price prediction 2023-2024

Regardless of ADA’s lackluster performance, the altcoin still registered an increase in numbers holders. As of this writing, the total number of ADA holders has increased to 4.47 million.

Source: Santiment

However, the increase in the number of holders may not be for the short term. Rather, new addresses may add the altcoin to their portfolio with the feeling that it is trading at a discount. The likely plan for these holders may also be to retain ADA for the long term.