Why is Cardano Surviving Despite the Market Crash?

Despite recent market volatility, Cardano has good support over $1.

Important Points to Remember

• The native coin of Cardano, ADA, has seen significant support in the $1 to $1.20 range.
• Cardano's supporters appear to be helping it maintain its popularity.
• Despite development difficulties, the robust community supporting Cardano is also helping to keep people interested.

Cardano's ADA cryptocurrency has undergone significant price movements since its introduction in 2017. There are various reasons why Cardano is keeping its value now that a support level appears to have been achieved.

Cardano has a high level of support.

Cardano surpassed its previous all-time high of $1.18 set in 2018 during a remarkable run at the start of 2021. Since then, the crypto markets have taken a hit, and Cardano is no exception. Top ten projects like Ripple have taken a beating, with XRP losing up to 70% of its value since April. Polkadot, the 9th most valuable cryptocurrency by market capitalization, has taken a hit, plummeting nearly 73 percent.

While the ADA token declined with the rest of the market in May, it appears to be finding support at its prior all-time high. Since the market crested on May 17, Cardano has lost less of its gains than the other top ten currencies, sliding down 48% from its current all-time high of $2.47. Cardano has retained its value in the $1 to $1.20 range as other projects have steadily dropped.

Cardano is commonly used as a hedge against Ethereum, as it is the third largest cryptocurrency by market capitalization (excluding stablecoins). Since the commencement of the current bull market, there have been similarities in price action between Ethereum and Cardano. Both tokens saw a surge in value in mid-May before reverting to levels seen in February and March. Cardano's current strength, however, cannot be fully explained by its use as a hedge against Ethereum.

Staking Made Easy

Cardano's staking approach may be one reason why demand for ADA has held up so well. Stakeholders receive rewards every five days at a rate of 4 to 6 percent annual percentage yield. ADA is easier to understand and more accessible to the ordinary investor than other Proof-of-Work coins. One-click staking is available on major exchanges like Coinbase, Kraken, and Binance, making ADA an appealing investment for even casual crypto investors.

For individuals wishing to run their own validator to stake ADA, Cardano has a lower barrier to entry than its competitors. The hardware requirements are minimal, requiring only 4GB of RAM and 24GB of memory. Running a validator on Solana, on the other hand, necessitates a high-end CPU and a minimum of 128GB of RAM.

The apparent support for ADA, as well as the ease with which it can be staked, have made it appealing as a lower-risk crypto investment. Even those who do not expect any short-term upward momentum may find ADA's current 6% APY intriguing if they are certain that stable support has been established. In a cyclical connection, when investors buy in for a stable return on investment, more demand for ADA is created, increasing the support.

Investors appear to be sticking with Cardano for the long haul, based on the volume of ADA staked across the network. Over the last six months, the number of wallets staking ADA has remained constant, never falling below pre-February levels.

Similar tendencies are being observed by investors who establish their own staking pools. Benjamin Cowen, a well-known quantitative analyst, has noticed consistent levels of ADA delegation to the staking pools he manages for his followers, arguing that people's devotion to staking is aiding in the establishment of support.

The community is the final aspect of Cardano's strong support. Founder Charles Hoskinson communicates with the Cardano community on a daily basis via YouTube and Twitter, keeping investors up to date on the project's progress. Cardano, like many other cryptocurrency projects, has been reluctant to deliver on promised features like smart contracts, which have yet to go live. The initiative, on the other hand, has effectively maintained investor interest by establishing a vibrant and engaged community.

It remains to be seen whether Cardano will be able to maintain its position in the future. According to technical analysis, ADA has strong support but is having trouble breaking out of its current range. Regardless of the short-term price movement, it appears that Cardano's fans are unlikely to abandon the cryptocurrency anytime soon.

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