If you follow the markets closely, and in particular the altcoins market, you will have noticed that ADA is doing quite well at the moment. What could be behind this rise? Well apart from the general market rebound, Cardano is about to release its Alonzo Purple update! 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.
What is the Alonzo Purple upgrade?
To make a long story short, the Alonzo upgrade is what will bring ADA up to the level of ETH from a Smart Contract perspective. Cardano was founded in 2015, which was the same year but did not adopt the same policy as its Ethereum counterpart at all. Indeed, Cardano preferred to bet on patience and the longer term by relying on a peer-review system.
What is a smart contract?
A smart contract is a computer code that simplifies the execution of certain contractual agreements by eliminating the need to go through an intermediary. Smart contracts are closely linked to blockchain technology, as the latter is the platform on which they are based.
Why is Purple very important?
The Alonso update is divided into several colors: blue, white, purple, red and black. Whatever the color, this whole update is about the implementation of Smart Contract, a milestone corresponding to the era we are in, Goguen.
The blue update allowed a small number of users (about 50) to test the smart contract features. The next one, the white update, increased the number of testers.
The purple update is very important because it will allow everyone to test smart-contracts on the Cardano testnet. The following updates will focus on the mainnet launch.
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What are the consequences for ETH?
It is difficult to predict exactly what effect the release of the ADA mainnet will have on ETH and other blockchains specialized in smart-contracts. All things being equal, it should have a negative impact on the use of the ETH blockchain.
Is this really a bad thing? The ETH blockchain is overloaded which leads to higher and higher transaction fees, so a decongestant would be great news for the end users (of DeFi platforms for example).
On the other hand, ETH is working on a major update, so let’s wait and see!
ADA Technical Analysis
At the time of writing this, ADA is trading just below an important resistance zone between 1.83 and 1.89.
The technical indicators are rather favorable to a retracement for the moment but if ADA manages to break out of its resistance zone, it will be an excellent bullish opportunity.
Indeed, this breakout coupled with strong fundamentals could propel ADA above $2 and beyond.
Where will ADA go from here? Well, as you might have guessed, we don’t believe in price prediction. But based on history, after every important update, the value of an asset usually has shown significant price action. Hence, unless there is a black swan, we can safely say ADA’s current price action is just the tip of the iceberg!
With IOHK CEO Charles Hoskinson’s announcement on August 13th, Friday (Yes! He doesn’t have a good sense of humour!), regarding the timeline for the launch of Cardano’s much-anticipated smart contract launch, the crypto community is definitely all ears (and eyes!). If you have been following our blog posts, you would have known by now that ADA is one of our top three altcoin picks as published in the blog post of November, 2020. From the time of the publishing of that article till now, ADA has outperformed even our expectations – a whopping ~12X!
Once again, the above proves that a long time horizon is indeed required to accumulate sweet gains! This is further proven by the 4C SMART Bots Performance Result – the longer the time frame that you allocate to the automated trading bots, the sweeter your gains will be!
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