After several months of selling, crypto traders are hungry for the opportunity to start trading again.
The pandemic essentially funneled capital into cryptocurrencies and provided a gamified trading environment. Every new bit of stimulus pumped prices even higher, while governmental crackdowns (ie China Bans) forced a retest of support levels.
Elon Musk managed to make Dogecoin (DOGE) a top 10 coin by market cap just by tweeting about it. Every day, the news created a new 100x cryptocurrency that went as quickly as it came.
Cryptocurrency traders/investors got used to hyper-volatile price action that allowed for those that were 'in the know' to make gains that even the most talented stock traders couldn't dream of.
Well, the last 6 or so months have brought us back to reality. When the money printers got turned off, cryptocurrencies got hit first and hit the hardest compared to any other type of global asset class.
Geopolitical and Macroeconomic chaos has not only tanked cryptocurrency prices, but it has also destroyed the sentiment of hope amongst traders.
Now, some of the most well-known and biggest cryptocurrencies are back in the news and bringing some potential excitement with them.
Cardano (ADA) at #6 and Ripple (XRP) #7 by market cap, you’d think that we would focus on these coins more often. The thing is, they each have as many haters as they have fans.
Despite underdelivering for quite some time, both Cardano and Ripple have the potential to breakout in 2022.
If you haven’t heard of Ripple, then you’re probably from the United States. We say that because the creator of the XRP token Ripple Labs has been tied up in a lawsuit with the SEC since late 2020 in which the company had been accused of operating the XRP token as an unlicensed security.
This lawsuit has meant that XRP has been widely unavailable on United States crypto exchanges during the most significant mass adoption period of the industry in its history. In fact, plenty of people out there believe that there was a coordinated effort to suppress the once highly popular Ripple token in favor of promoting Ethereum.
Cardano is another once hyped project that has never lived up to expectations, as the once claimed ‘Ethereum Killer’ only just deployed smart contract functionality with the project’s Alonzo upgrade in September 2021.
ADA is also often associated with its tumultuous creator who also happened to be a co-founder of Ethereum, Charles Hoskinson. Although Hoskinson is known for continued arrogance in the face of his own slow-pace of development, he is steadfast and has even recently made comments about how being slow and steady has helped Cardano avoid imploding like LUNA recently did.
The one thing that both XRP and ADA have in common is that they were 2017 Bull run darlings that just didn’t keep up in the pandemic rally.
ADA managed to breakout to new all-time highs around $3.10 in the 2021 bull run, but it topped out before the rest of the large-cap group in late August.
Moreso, ADA only made a new all-time high +136% above its previous cycle high, while Bitcoin and Ethereum’s 2021 highs were +249% and +238% above their own respective highs from the 2017-2018 cycle.
Even less impressive than Cardano, XRP did not manage to even test its own all-time highs around $3.32 despite running up in 2021, almost certainly as a result of the projects ongoing lawsuit.
Cardano has another update of sorts that will take place on June 29th called the Vasil hard fork, which is expected to allow the network to scale and welcome mass adoption once and for all.
The past two major updates for the Cardano blockchain preceded massive price growth, however, those took place during much kinder global economic times.
If sentiment can stay strong enough for ADA in the runup to 6/29, there is a good chance it can take out its 50-day moving average and the negative trend that has been intact since the coin made its all-time high.
We’re seeing a bullish divergence on short-term momentum according to RealMotion for ADA, with the 50-day moving average already having been taken out for nearly 2 weeks. This may be an early signal that underlying momentum is improving and telling us that a similar move up in price is to be expected.
XRP on the other hand isn’t as clear of a trade as ADA, as any hope for an XRP breakout is predicated on a favorable settlement against the SEC. The good thing is that all of the reports and updates coming out about the case in recent months have been very much in the favor of Ripple Labs, and based on the sentiment of the public one would think that it is essentially a guarantee that XRP will prevail and return to its once great status.
XRP needs to re-establish support above its 200-week moving average, but it doesn’t look ready to change course anytime soon…
At the time of writing, XRP appears to be breaking down further from its current bear flag.
Tuesday 6/7 has the potential to be a relatively big news day for XRP, but an after hours selloff for the broader crypto markert looks to be weighing heavily on its price. Click here to read more about what is expected to happen in the ongoing lawsuit tomorrow.
If you read our weekly reports, you'll note that our last several weeks of market commentary have consistently been revolving around the idea that you probably shouldn't be buying altcoins or bottom picking, but if you do then you should probably just stick to Bitcoin for the time being.
The only news that could possibly come out that would have any significant effect on cryptocurrencies is likely to be bad news, because any good news would simply be overshadowed by looming inflation, supply-chain disruptions, and geopolitical stress.
Bitcoin is down with everything else in 2022, but has stood up better than any and every other cryptocurrency. Bitcoin may not be as much like Gold as economists were saying last year, but compared to the rest of the crypto market Bitcoin is undoubtedly the safest option.
So when you compare any altcoin to the stalwart that is Bitcoin, there is nobody that even comes close.
However, plenty of projects are continuing their push for relevance.
Check out our new CryptoPulse Twitter account @MGCryptoPulse for daily tweets and updates about the crypto space!