We’ve been hearing a lot about ADA lately and its implementation of smart contracts. But Cardano is not the only blockchain to overshadow Ethereum; Solana is catching up fast too! Can these two projects dethrone ETH? That’s exactly what today’s article is about!
Disclaimer: Our content is intended to be used and must be used for informational purposes only. It is very important to do your own research and analysis before making any investment based on your personal circumstances.
The recent pump - ADA and SOL
If you’re interested in the crypto market, altcoins in particular, you’ve probably noticed the meteoric rise of ADA and SOL.
Indeed, since the beginning of August, SOL has increased by more than 100% while ADA has appreciated by more than 85%.
Why are these two cryptos so hot at the moment?
If you’ve been following the crypto market for a while, you know that the hype works in waves, whether it’s DeFi or more recently NFT. It just so happens that Solana is a platform of choice for NFT, which explains its current success.
Regarding ADA, the Alonzo update, which we talked about in the last article, is undoubtedly the main vector of this recent upward phase. Undoubtedly, the smart contract capability will be game changing as evident in the recent price action of ADA.
Competitor for ETH?
We have already talked about it but ETH is in a way a victim of its own success. The fact that ETH was the first platform to accept Smart Contracts has resulted in an overloaded network and high transaction fees.
The new Smart Contracts platforms like Solana and Cardano should help to unclog the ETH network, which is a good thing for the end user.
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The future of ETH
Nevertheless, ETH will not let itself be left behind like that, as the network is also working on a major update, ETH2.0. One of the big differences never implemented before is scarcity.
Indeed, for a long time the ETH offer was infinite, but this is now history as burns are regular since the EIP 1559 update came into effect. From a technical point of view, this could very well be an opportunity.
ADA listed a new ATH a few hours ago (as of this writing), trading at ~$2.55, with strong support between ~$2.17 to ~$2.26 range. We should expect a retracement, which will be an excellent opportunity to get into position. Always remember, never FOMO into any coin and never enter during big, fat green candles!
Regarding Solana and ETH, both need to break out of a resistance zone at $78 and $3400 respectively before considering a buy position on retracement.
Addressing the big narrative of late – “Will Cardano and Solana replace Ethereum?”.
Anything is possible in crypto given that things take place at lightspeed in this new asset class. For the moment, we do not see that happening any time soon given the current market cap of Ethereum, Cardano and Solana. As for the future? Who knows? Anything is possible in crypto!
Next question that we get asked a lot lately – if I have $1,000 to invest in just altcoins, should I put it into Ethereum, Cardano or Solana? Our suggestion as per always – never put all your eggs into one basket! Wait for retracement to get an entry point and split your capital across different coins. Using their market capitalization as a guide, it would be wise to allocate your funds according to their market cap dominance.