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The new year has only started, and there is already plenty of activity in the crypto industry. Some coins have already reached new ATHs, others have seen considerable corrections, while others are either starting a new rally or are fluctuating between two levels, trapped and unable to break either one of them.
Cardano (ADA) is currently one of the later coins, with its price roughly 50% below its ATH which it reached only a few months earlier. The coin was ended up trapped after the so-called Christmas crash, but seeing how eventful ins 2021 has been, it is worth reviewing its past year and seeing what led it to where it is right now.
Cardano in 2021: A year in review
A year ago, back in January 2021, Cardano’s price was at the lowest point that it will see during the following 12 months. It started the year with a low price of $0.175, and as soon as 2021 kicked off, so did its price surge.
The coin managed to hit $0.33 by January 6th, meaning that it doubled its price in less than a week. It encountered a powerful resistance there, however, which prevented it from surging further up at the time, but the coin continued to push throughout January, and it paid off as soon as February started.
In the very early days of February 2021, Cardano’s price skyrocketed all the way up to its next big resistance at $1. Technically, it did not reach this level right away, as its price stopped its climb at $0.92, after which it saw a minor correction to $0.85. However, this support allowed it to surge further up, and by the end of the month, ADA once again nearly doubled its price by hitting $1.32.
Its next big goal was $1.5, which it attempted to reach several times in March and April, only to end up rejected every time, until it finally managed to reach it on April 15th. Unfortunately, it was rejected again, and it dropped back to the support at $1.1, from which it then launched another rally in early May.
This time, the coin was a lot more successful, and by May 16th, it reached a new all-time high at $2.3. However, this was also around the time when Elon Musk announced that Tesla will no longer accept Bitcoin payments due to the coin being too harmful to the environment, which was followed by a market-wide price crash, that caused most coins to lose 50% of their value.
Cardano lost more than most, but it still suffered a great loss, dropping from $2.3 to $1.3, It then spent the rest of May fluctuating between a support at $1.3 and a resistance at $1.7, never managing to breach it. Then, in early June, it seemingly lost its strength, and as the bulls withdrew from the market, its price started spiraling down until it reached a support level at $1.
Cardano’s drop finally stopped around July 20th, only for a brand new rally to replace it. This rally was fueled partially by market performance, and partially by huge anticipation about the arrival of Cardano’s smart contracts.
The end of the Shelley Era
Those familiar with Cardano know that the project’s roadmap predicts five phases of development, and at this time, Cardano was getting ready to finally complete its phase two. The completion of the so-called Shelley Era meant that the project will finally launch smart contracts, which would, in turn, allow the development of dApps, DeFi protocols, NFTs, metaverse projects, the launch of new cryptos, and more. Essentially, it finally allowed Cardano to become a development platform like Ethereum, only better.
Since this was something that the ADA community has been waiting for for years, there was plenty of excitement to go around. As the completion of the second Era approached, the hype pushed Cardano’s price up rapidly. Between July 20th and September 3rd, Cardano’s price skyrocketed from barely above $1 to $3 per coin.
However, as the actual launch of smart contracts arrived in early October, the price once again corrected, this time to a new biggest support at $2. This support managed to hold until mid-November, which was the time when a second major crypto price crash took place. If not for this market-wide event, ADA price would have likely remained above $2, but the event forced it to crash down until it found a new bottom at $1.25.
This level has served as Cardano’s new bottom ever since December 10th, 2021. After initially reaching it, ADA attempted to surge several times, only to be stopped by a resistance at $1.35. The resistance was finally broken a few days before Christmas, on December 22nd, when ADA managed to surge past it and hit $1.5 once again, and even go to $1.58.
This was when the so-called Christmas crash took place, and it was another market-wide event. Once again, Cardano lost its value due to a global bearish wave that forced it from $1.58 to $1.3.
Cardano starts 2022 trapped between two levels
Cardano then spent the last few days of 2021, and the first five days of 2022 fluctuating between this support level, and a resistance at $1.38, which is still preventing it from going back up to this very moment. At the time of writing, ADA price sits at $1.34, after growing by 0.09% in the last 24 hours. However, it is worth noting that the holiday season is likely the reason why the coins are still relatively stagnant, and there is not that much activity these days.
However, it is likely that Cardano’s coin will start seeing more activity soon, as the project’s blockchain has seen massive amounts of development over the last few months, launching new projects and granting ADA new use cases, and resulting in greater demand.
To learn more about this token visit our Investing in Cardano guide.