Chart for ADA/BTC
Cardano (ADA) has been the centre of attention among crypto enthusiasts for quite some time. Since its inception, this unique project has been considered a better alternative to Ethereum (ETH)’s scalability and proof of stake model. However, Cardano(ADA) is not alone to have such a solution. There are other cryptocurrencies with unique solutions to these problems that are considered undervalued. Cardano (ADA) on the other hand is often criticized as being overvalued. It has long enjoyed a top 10 rank and continues to see interest from the crypto community. The brain behind this project, Charles Hoskinson is the reason this project got a lot of attention in its early days. There is no doubt that Charles Hoskinson and IOHK are big names that have truly earned their reputation as deserved. However, critics of Cardano (ADA) still believe that the project is overvalued.
The main reason why Cardano (ADA) is often considered overvalued stems from false metrics. Most people in the crypto community judge a cryptocurrency’s value by the number of dApps it hosts, the number of ICOs it has held or the number of partnerships it has. If we judge Cardano (ADA) by those metrics, then it is massively overvalued. However, as we have seen in the past, Charles Hoskinson and his team at IOHK care less about market hype and publicity and focus more on the work. It is hard to prove at this time how Cardano (ADA) is one of the best platforms in the long term compared to other platforms as the team has a lot of work ahead of it. This is why we have such extreme opinions regarding this coin. On one hand, we have people who overestimate Cardano (ADA)’s potential and on another hand we have people who completely underestimate the project.
Cardano (ADA) has been through an extensive correction same as the rest of the market. However, there is still plenty of room for further downside. The chart above for ADA/USD
shows that the price of Cardano (ADA) has now entered a rising wedge and risks significant selloff in the short term. Cardano (ADA) may not be an overvalued project in itself but the past few months have seen investors approach Cardano (ADA) with the same mindset as some approach Ripple (XRP). This mindset ies that of the one big thing to dominate all. That is a tall order from an investment standpoint and is not prudent at all. However, be that as it may, we have seen a similar trend emerging in the Cardano community. Now, the vast majority of these people have no idea as to what Cardano (ADA) is or how it compares to other platforms. They just believe it is an undervalued coin which might be the next big thing. This is why some people think Cardano (ADA) is overvalued and maybe this behavior has actually made it overvalued. Cardano (ADA) is currently focused on releasing new wallets but soon as it helps create some shiny new Dapps with its Rusk SDK, it may not seem as overvalued to most people.