Why is ADA slower than Bitcoin and ETH? Is there a way out?

Bitcoin has surpassed $ 55,500 in the past 24 hours, most recently on May 12. The ETH also retested its monthly high.

In contrast, ADA has not yet hit a high, which it reached on September 2nd. While the top two assets rallied at the same time, the third largest cryptocurrency on the market – ADA – couldn’t muster enough upward momentum. This is an unlikely point for ADA in 2021.

This article analyzes ADA’s recent performance to understand the current hurdles the asset is facing.

BILLIONfilial piety towards buyers ADA destroy the bull market?

Large number of transactions (green) | The source: IntoTheBlock

follow data From IntoTheBlock, ADA’s average number of large on-chain transactions plummeted in late September, and although the rebound has begun, the index is currently below its 6-month average.

Large trades usually take place when investors move $ 100,000 or more. The decline in large transactions therefore shows that the current period is no longer as active as it was at the beginning of the year.

In addition, the proportion of active addresses has also fallen below average, which suggests that addresses with less credit have been transferring coins since September 15.

Cash flow by asset | The source: Coinshares

Additionally, CoinShares’ latest weekly cash flow report also reveals a lack of ADA buying activity from institutional investors. The evidence is that Bitcoin and ETH achieved inflows of $ 68.7 million and $ 20.2 million, respectively, while ADA was only $ 1.1 million.

Here it is important to note that no other asset has seen more inflows than BTC, ETH dominating them all.

The Grayscale report did cause unwanted damage are not?

Grayscale considers Cardano to be an underrated project in report Recently “Introduction to Cardano”. At the same time, the potential immediate risks associated with ADA are highlighted.

For example, the report suggests that Cardano does not have a track record of an application ecosystem on the mainnet as the smart contract functionality was just added for the first time. Therefore, it remains unproven with regard to the maintainability of dApp (decentralized application) and the user acceptance rate.

In addition, the report added:

“Cardano is in strong competition with many other Layer 1 basic blockchains with smart contract functionality, including: Ethereum, Solana, Internet Computer Protocol, Avalanche, …”.

Time Ultimate recovery?

In the short term, the price for ADA remains cautious. However, the stepping stone could be released at any time if the top two assets continue to increase their capitalization and bring more liquidity to the market as a whole.

The source: Trade view

At the time of writing, ADA appears to be struggling to break above the $ 2.3-2.2 resistance range. Therefore, closing prices above this range could allow the asset to take on a bullish sentiment. Soon, investors could step in to push the price higher.

At the time of writing, the trading volume is also very low as the on-chain metrics mentioned above show.

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