Community Consensus: Pick two trading pairs for Qluster to analyse, this week top-voted were both Cardano and Solana.

Using the log-scale for altcoin modelling as discussed in Technical Outlook, Edition #52, trend clarity can be further revealed using the logarithmic scale with all available trading data.

Cardano, ADA/USDT Log- 1 Week (W1)

Cardano Analysis

Cardano suffers a candle close below the W1 20 EMA (GREEN), an event that has not happened since ADA/USDT last traded at USD 0.10.

These bearish expectations have been aligned with the current BTC/USD repricing occurring as of late. Thus, if bears manage a close below USD 31K while Bitcoin Dominance (BTC.D) increases, altcoins could be met with a purge.

Cardano, for a long time, was considered to be an “Ethereum killer” project. However, due to extensive delays in development, the asset has rebounded hard from its peaks. Cardano will not compete at a high level with other smart contract platforms if they cannot integrate the technologies and tools required to allow developers to build a robust DeFi ecosystem on top of Cardano. The incoming potential of a bear market and a lack of progress in these areas could be a recipe for disaster.

It seems like Cardano is more hype than potential 🤔 

Solana, SOL/USDT Log- 1 Week (W1)

Solana Analysis

Similarly, Solana has also closed below the W1 20 EMA (GREEN) at USD 26, which has not occurred since SOL/USDT was trading at USD 2.5.

However, unlike Cardano, Solana has a robust ecosystem on which many developers are building products on top of. The cryptocurrency ecosystem moves fast, so it’s best to hedge one’s exposure, as many projects may come and go as the industry develops more advanced technologies and robust consensus methods. Solana could potentially be one of the few smart contract platforms that do not run on the EVM to achieve widespread adoption.

However, as discussed above, BTC.D continues to rise, and the markets, in general, are looking shaky. Therefore, it’s always best to optimise entry points to maximise potential future profits.

Q’s Conclusion

While Bitcoin dominance rises and BTC/USD falls, altcoins may see further downside. However, it’s always good financial practice to not put all your eggs in one basket, and hedge positions by investing in multiple different technologies.

See you again for the next update.

- q

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