The Cardano price had a mixed year in 2021. ADA, its native token, initially jumped by 1,840% from January to August. It then retreated by about 57% to the current $1.3080. Its market capitalization dropped from an all-time high of more than $90 billion to the current $43 billion.
Cardano 2021 review
Cardano became a popular cryptocurrency in 2021 as investors sought a cleaner and more efficient platform than Ethereum. This explains why its price jumped sharply in the first half of the year.
As it got more popular, some investors started to question about the project. The most notable critic of Cardano was Michael Novogratz, who said that he could not find any project built on Cardano. For example, with Ethereum, you can point to some popular projects like Uniswap and Aave.
Cardano attempted to change this by launching the Alonzo hard fork that introduced smart contracts technology to the network. While the Cardano price jumped sharply towards this launch, the price collapsed by more than 50% after the launch.
This price action was mostly because investors were concerned about the lack of new projects built using Cardano. Also, there were concerns about the rising competition in the smart contract industry since there exists faster and more efficient projects like Solana, Hedera Hashgraph, and Near Protocol.
Still, Cardano has a big community that could push it higher in 2022 even if the fundamentals are not all that good. Therefore, while a bear case can be made, it is a bit difficult to recommend shorting the coin, especially now that believers think that it is undervalued.
Cardano price prediction
Turning to the weekly chart, we see that the ADA price formed a cup and handle pattern between 2018 and 2021. The cup is shown in yellow and the upper side was at $1.3015. It moved above the upper part of the cup and rose to an all-time high of $3. Now, the coin is forming the handle section. In price action analysis, a cup and handle is usually a bullish sign.
It has also moved slightly below the 25-week and 50-week moving averages. A closer look shows that the two are about to make a bearish crossover.
Therefore, there is a likelihood that the Cardano price will continue struggling in the first part of 2022 and then resume the bullish trend later on.