After its run-up and subsequent pullback, some may believe the ship has sailed with Cardano (CCC:ADA-USD).
In other words, now that this altcoin has smart contract capabilities thanks to its Alonzo upgrade, it may be a while before Cardano makes any big moves higher.
Is this the right take? Yes and no. To some degree, it’s likely that this crypto, the third-largest crypto by market capitalization, will continue to trade sideways. Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD) are trending up. But due to many factors, Cardano’s chances of following right now may be slim.
However, that doesn’t mean you should avoid Cardano ahead of it making further moves lower. Instead, Cardano appears set to hold steady, at between $2 and $2.50 per token, until it makes its next big move higher. Once that happens, Cardano stands to not only hit its past high of $3.10. It may eventually make its way up to $6 per token, as it makes more progress grabbing DeFi (decentralized finance) market share from Ethereum.
As always, caution is key with the crypto space, as it can be far more volatile than stocks. But if you’ve only now getting into this asset class, this may be one of the best cryptos to get into. Particularly before it resumes the incredible run it’s been on since the start of 2021.
How Much Longer Will Cardano Tread Water?
First things first, why is ADA so sluggish right now, while its larger rivals BTC and ETH are trending again? Some of it may be due to traders still looking to take profit from this altcoin’s big run-up ahead of the Alonzo hard fork.
That, however, is probably not the only reason. A report from institutional investor Greyscale may be driving its sideways performance as well. The overall report was bullish, but highlighted key risks with it. Yet the more important question isn’t why Cardano is stuck in neutral. Instead, the question should be when it gets out of neutral.
Fortunately, while it may not happen tomorrow, this consolidation phase may not last for long. Some crypto market analysts see the token starting to break out again as early as November. Others see its move from neutral back to drive happening even sooner.
Either way, today may be the right time to pounce. It appears that $2 to $2.50 is Cardano’s new floor, and many factors lie ahead that could send it to significantly higher prices. Among established coins, altcoins, and even joke coins like Shiba Inu (CCC:SHIB-USD), this is still one of the better opportunities for crypto investors in today’s market.
ADA’s Best Days are Still Ahead of It
Despite its more than 12-fold gain in 2021, upside potential remains ample for Cardano. Investors buying into it today still have a shot of seeing it deliver a percentage return in the mid-triple digits over the next few years.
This high-utility altcoin has greater chances to bridge the gap between its valuation ($70.6 billion) and the valuation of Ethereum ($424.1 billion). As my InvestorPlace colleague Brenden Rearick recently reported, the above-mentioned upgrades opened the door what this crypto’s platform is capable of doing. These new capabilities include automated contract execution as well as the ability to mint NFTs, or non-fungible tokens.
With this, the platform is now more attractive for DeFi and dApp (decentralized app) developers. Add in other advantages, like the fact Cardano is already proof-of-stake, versus Ethereum, which is still working on it, and the number of projects starting up on this blockchain could pick up in a big way.
As its share of the DeFi space catches up to that of Ethereum, ADA stands to narrow the spread between its market capitalization and Ethereum’s market cap. It may take time, but there may be a path for Cardano’s token price to ultimately rise to $6 per token.
This Remains One of the Strongest Crypto Opportunities
ADA-USD may not be setting the world on fire today, but don’t consider it to have peaked in popularity. Even as altcoins like Solana (CCC:SOL-USD), while promising, could catch up to it, it still remains the top contender for the Ethereum killer crown. As it parlays its newly enabled capabilities into increased share of the DeFi market, Cardano stands to see further big increases in its token price.
It may take time for its next big move to play out. Yet as one of the strongest long-term crypto opportunities out there, consider Cardano a buy at today’s prices.
On the date of publication, Thomas Niel held long positions in Bitcoin and Ethereum. He did not have (either directly or indirectly) any positions in any other securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.