Is 2023 Cardano’s Year?

2023 will be a big year for one of the top 10 cryptos by market cap, Cardano ($ADA.X).

Crypto Capital Venture Founder Dan Gambardello thinks that Cardano’s time to shine is 2023:

#Cardano will be a top altcoin to hold in 2023 and most people won’t realize it until it’s 1,000%+ again.$ADA

— Dan Gambardello (@cryptorecruitr) January 1, 2023

$ADA is undervalued and oversold. Fear will blind most people, making them unable to see it.

Zoomed out in 5 years it will make so much sense.

Save this tweet.

— Dan Gambardello (@cryptorecruitr) January 6, 2023

In September  2022, The Litepaper talked with Input Output Group’s (IOG) Chief Marketing Officer, Jerry Fragiskatos (you can read that interview here). 

Mr. Fragiskatos mentioned in the interview that “All I can say is that 2023 will be a big year for Voltaire.”

Voltaire is the final step in Cardano’s roadmap. From Cardano.org:

“The Voltaire era of Cardano will provide the final pieces required for the Cardano network to become a self-sustaining system. With the introduction of a voting and treasury system, network participants will be able to use their stake and voting rights to influence the future development of the network.”

“… Voltaire will also see the addition of a treasury system, whereby a fraction of all transaction fees will be pooled to provide funds for development activities…”

“When both a voting and treasury system are in place, Cardano will be truly decentralized and no longer under IOHK’s management. Instead, Cardano’s future will be in the hands of the community…”

In other words, Cardano will be on its own after Voltaire is done. 

Djed

Coming sometime this month (January 2023) is Cardano’s first algorithmic stablecoin, Djed (DJED).

Just as Cardano is named after Gerolamo Cardano, and Cardano’s wallet Daedalus is named after the mythological Greek architect who created the Labyrinth maze to imprison the Minotaur (which happens to be the logo of the Daedalus wallet), Djed is an ancient Egyptian symbol that means stability.

Pegged to the U.S. Dollar, Djed is considered an over-collateralized (between 400 and 800%) stablecoin that uses not just the ADA token but a new(er) concept called a Reserve Coin.

The reserve coin, SHEN (Shen is another Egyptian symbol for protection, connection, royalty, and symmetry), maintains the algorithmic peg and provides incentives to hodl. 

However, there is extreme skepticism after Terra’s collapse in 2022 and the destruction of its stablecoin, TerraUSD. 

And the skepticism isn’t just because of Terra’s collapse; it’s because of this: all algorithmic stablecoins have failed.

We’ll have to see if Cardano can pull it off.

Speaking of $ADA.X.

From a technical analysis perspective, Cardano looks messier than a floor after a Roomba that’s just finished a six-hour cleaning cycle and didn’t realize it started that cycle by mowing over, repeatedly, a pile of freshly laid Tibetan Mastiff poo, spreading a trail a horribleness over those six hours that a 3-year old who just discovered poopie can be used as finger paint would struggle to compete with. 💩

If you don’t want to read all the fancy schmancy technical analysis bits, look for the TL;DR (Too Long; Didn’t Read) below.

Cardano 

Cardano hit a new 21-day high today, and yesterday’s close is already the highest of the last 21 days. 

On Cardano’s weekly chart below, I placed arrows pointing to things you can ignore as they’re not immediately relevant to this analysis. 

From an Ichimoku perspective, the most immediate and important factor that analysts see is the shaded black/grey zone between the candlesticks and the Tenkan-Sen. ⚠️

Why?

Because large gaps between the Tenkan-Sen and the bodies of candlesticks often ‘fill’ within four to five periods, the end of this week brings it to seven without a return to the Tenkan-Sen.

How probable is it that Cardano will return to the Tenkan-Sen? Let’s take a peek at the weekly oscillators, too.

The Composite Index and the RSI have sharp moves higher, with the RSI showing a return above the first oversold level (#2) in a bear market, 30. 

However, the weekly RSI has been stuck between the 35 and 30 levels since October 2022, and there’s no reason it couldn’t remain that way.

For the Composite Index, the CI line’s (red) angle suggests (#1) that if momentum remains strong going into next week, it will likely cross above its fast average (green) and, possibly, its slow average (yellow). 👀

Analysts see the primary and strongest resistance for Cardano at the weekly Kijun-Sen, which is also the 50% Fibonacci retracement (not shown) of last week’s swing-low at $0.239 and the high of the weekly May 9, 2022, strong bar. 

The daily chart for Cardano (not shown) faces resistance against the daily Kijun-Sen at $0.279, while the daily RSI is up against the first overbought level in a bear market, 55. 

TL;DR

Near-term resistance: $0.279

Intermediate resistance: $0.328

Primary resistance: $0.417

Analysts anticipate some resistance in the $0.279 value area, but any sustained breakout above that level is likely to continue toward the Intermediate and/or Primary resistance level(s). 🔭

The trend remains extremely bearish, and the path of least resistance remains lower despite recent bullish signs. 

Bitcoin

We won’t tackle a ton on Bitcoin’s chart – we hit it pretty hard in Wednesday’s Litepaper. 🪙

Not trying to throw any shade here on the bulls, but while the mood of crypto enthusiasts is somewhat upbeat, analysts warn that caution should still be the name of the game. And this is especially true if we take another look at Bitcoin’s monthly chart. 

Wednesday’s Technically Speaking article highlighted several bullish considerations for Bitcoin, but there are some major red flags, too. 

The Ichimoku Cloud (Kumo) is an important barometer of how analysts, traders, and investors interpret an instrument’s sentiment. Above the Cloud is interpreted as bullish, and below is bearish. 

Thick Clouds represent strength, indecision, and volatility. Thin Clouds, however, represent weakness. It’s as if the closer Senkou Span A and Senkou Span B are to each other, the weaker they become. So, theoretically, the behavior that analysts expect to see when price approaches a thin Cloud is an easy time moving past/through it. 

This is where things get very, very iffy. 🤔

Except for the quick crash and rally from the Covid crash in 2020, Bitcoin has never fallen below the Ichimoku Cloud. In fact, Bitcoin is still so young that the first time its monthly chart had a complete Ichimoku chart was in December 2016!

What analysts, investors, and traders do know is this: risk-on appetite is low across the board in all asset classes, and crypto represents the riskiest of the risky assets out there. And the Cloud for Bitcoin is very, very thin. 

If you’re interested in learning more about the Ichimoku Kinko Hyo system, read our introduction to Ichimoku here. 🤔