Can Cardano bounce back?

Cardano network is undergoing a significant upgrade - hard fork 'Vasil'. What can we expect and how will it affect the future of the project?

• Cardano is a project that has proven its utility, and its creator Charles Hoskinson believes in the long-term success and widespread adoption of the cryptocurrency. At the same time, he points out that it is not in direct competition with Ethereum due to the differences in the potential uses of the two blockchains;
• After the spectacular collapse of Luna, which was one of the 'heroes' of the De-Fi token boom, market attention may move towards older projects that have been on the market for many years;
• In the world of cryptocurrencies, traders often experience so-called 'Event Rallies' where the price of a given cryptocurrency rises when a project is approaching a significant milestone only to fall sharply as soon as the event takes place. Speculators could describe this phenomenon as 'buy the rumors, sell the facts'. At the same time, in a time of market weakness, which we are observing at the moment, it is hard to expect spectacular price rallies of projects like Cardano. Chainlink, Litecoin and many others;
• Altcoin prices tend to rise sharply when the investors are almost certain that bitcoin is in a bull market. When sentiment is bearish, Bitcoin provides a somewhat 'safer' exposure to the crypto sector, although it can pull the entire market down with it at any time;
• Hard fork 'Vasil' is expected to introduce a number of changes - improving Cardano scalable design and the network's capabilities as part of the Hydra upgrade by increasing the possible number of transactions per second from the current 250 to 1,000,000. By comparison, the popular VISA network can process up to 75,000 per second, although in reality the network processes around 1,700 transactions per second;
• The problems of the Solana chain, which has scored an impressive rally and jumped to the top 10 cryptocurrencies, show that the network's ability to process transactions smoothly is very important. Currently, Solana's creators are still working on fixing the clogged network, where latency times were as high as 9 minutes recently. The creators of Cardano want the network to ultimately handle thousands of payments per second.
• Hoskinson has repeatedly pointed out that the many projects that emerged quickly and gained powerful valuations later experienced problems later on. The developer often shares his thoughts with the market and fans and recently pointed out the risk of catastrophic malfunction if the industry continues to expand so rapidly;
• Cardano competes technologically with the relatively new BitGert project, which has become famous for its ability to process 100,000 transactions per second and is currently the fastest blockchain. However the upcoming Hydra update will allow Cardano to surpass the competition in this field. Additionally, nearly 500 different projects including smart contracts, DeFi service platforms and Metaverse platforms are currently being built in the ecosystem.
• Potentially greater interoperability and network liquidity capabilities could premium Cardano's blockchain within the growing Metaverse trend and make the project attractive to developers as well as investors;
• Hoskinson believes in the powerful potential of Africa, as a continent with limited access to banking services. For this reason, this market can become a place to introduce financial revolutions like cryptocurrencies, which are gaining popularity there. Cardano will try to capture as much of this market as possible.

Cardano, MN interval. The chart shows a powerful sell-off which started in September 2021. Earlier Alonzo update was introduced, which allowed smart contracts to be processed in the blockchain which caused a massive surge. At the same time, we see that in May 2021, Cardano halted declines near $1 and launched a bullish rally despite Bitcoin was still moving in a sideways trend. A similar scenario with the Hydra and Vasil update seems less likely as market sentiment is near all-time lows, and investors are reluctant to take significant risk. At the same time, however, Cardano introduced a lot of interesting changes, while the largest token holders continue to acumulate. The current price levels may prove suitable for long-term investors, especially taking into conosderation that the project has never experienced so pro-longed sell-off. Source: xStation5