As of October 2023, the price of ada to usd was $0.25, rising by 13.6% from the year’s low of $0.22, but still falling by 92% from the peak of $3.10 in September 2021. Recent price fluctuations show that ADA rose by 18% (0.23 to 0.27 US dollars) in the first two weeks of October, and then pulled back to the current level. The 30-day volatility (standard deviation) is 5.2%, higher than Bitcoin (2.5%) but lower than Dogecoin (8.3%). The key drivers include the progress of the Cardano ecosystem, market sentiment and macroeconomic changes.
Technological upgrading and ecological development
Cardano’s “Vasil Upgrade” was completed in July 2023, increasing the execution efficiency of smart contracts by 50% and raising the average daily on-chain transaction volume from 50,000 to 120,000 (data source: CardanoScan). In September 2023, Cardano collaborated with the Ethiopian government to launch an agricultural traceability DApp, pushing the number of ADA holding addresses to exceed 4 million (with a monthly increase of 10%). Despite this, the locked value (TVL) of DeFi is only 120 million US dollars (0.3% of Ethereum), and the scale of the ecosystem still needs to be broken through.
Market sentiment and capital flow
The cryptocurrency Fear and Greed Index is currently 55 (neutral), but the ADA social discussion volume (Twitter+Reddit) has decreased by 15% week-on-week, and the weighted sentiment index has dropped from +0.6 to -0.2 (data tool: LunarCrush). On-chain data shows that addresses holding more than 1 million ADA have net reduced their holdings by 120 million (about 30 million US dollars) in the past 30 days, while retail investors (holding 1,000-10,000 ADA) have increased their holdings by 45 million (about 11.25 million US dollars). The trend of portfolio diversification is obvious.
Macroeconomics and regulatory pressure
The yield on the 10-year US Treasury note rose to 4.8% (the highest since 2007), putting pressure on the valuations of risky assets. The 30-day correlation between the ADA and the Nasdaq index was 0.32 (0.35 for Bitcoin). In terms of regulation, the SEC has not yet clearly defined ADA as a security, but the lawsuit against Binance in June 2023 mentioned that “some tokens meet the definition of security”, which has raised market concerns. If ADA is recognized as a security, ada to usd may fall to $0.15 (Morgan Stanley model).
Competition and capital diversion
In 2023, competitors such as Solana (+210%) and Avalanche (+85%) performed far better than ADA (+25%), with a significant effect of capital diversion. According to the report of CoinShares, last week, the Cardano fund had a net outflow of 8 million US dollars (accounting for 4% of the total assets under management), while the Solana fund had a net inflow of 24 million US dollars. In addition, ADA’s market capitalization ranking dropped from 8th to 10th (CoinGecko), reflecting the shift in investor preference towards high-performance chains.
On-chain data and miner behavior
The current circulation of ADA is 35 billion (total 45 billion), with a pledge rate of 64% (22.5 billion participating in the pledge), and an annualized rate of return of approximately 4.5%. Despite the high staking rate, the number of active addresses on the chain (an average of 80,000 per day) is only 20% of that of Ethereum, and the monthly trading volume of DEX is only 300 million US dollars (1% of Uniswap). The income of miners (equity pool operators) has declined, with the average transaction fee income dropping from 0.05 ADA per transaction in 2022 to 0.03 ADA per transaction, resulting in the closure of some nodes (the proportion of closed nodes in 2023 was 5%).
Derivatives market signals
Deribit’s outstanding ADA options contract volume reached 120 million US dollars, with call options with an exercise price of 0.30 US dollars accounting for 35% (nominal value 42 million US dollars), but the perpetual contract funding rate turned negative (-0.02%), indicating that leveraged long positions were overheated. If the price drops below $0.23 (the 50-day moving average), it could trigger a $180 million long margin call (data source: Coinglass).
Operation suggestions and risk warnings
Short-term strategy: If ada to usd breaks through $0.27 (the October high), a light position can be taken to buy long at $0.30 (stop-loss at $0.25). If it drops below $0.23, short sell to $0.20 in reverse. Long-term investors need to pay attention to the progress of the application implementation in the Cardano ecosystem. If the TVL fails to exceed 500 million US dollars within half a year, it may face further valuation compression. Beware of black swan events – such as during the Terra collapse in 2022, ADA plunged by 22% in a single day (0.50 to 0.39 US dollars).