Sell The News? Cardano Heading Southwards Days After Entering Smart Contracts Era
On Sunday, Cardano deployed the Alonzo upgrade, and with it, sellers showed up.
In the peculiar case of buying the rumor and selling the news, Cardano buyers and hodlers alike started their week with a rude shock as ADA’s price shed 9% in value by Monday with losses running since Sunday Evening when Cardano’s much anticipated Alonzo upgrade went live on the mainnet. Over $30M in ADA was also liquidated over the first 24 hours.
Despite huge growth in enthusiasm and mammoth ADA purchases for the better part of last week in anticipation of price spiking northwards, the asset’s price seemed to have taken a turn for the worst after the upgrade.
The upgrade which arrived at 21:47 UTC on rolling into EPOCH 290 is the start of the Alonzo and Smart contracts era for Cardano. It is expected to bring out various capabilities on Cardano’s network through the integration of Plutus scripts onto the blockchain allowing the implementation of smart contracts on Cardano. For the first time, decentralized applications(DApps)will be able to build on and host their use cases given Cardano’s achieved scalability and interoperability.
The upgrade has come a long way, with the Byron reboot in March 2020, being the one that truly aided in the foundation for the whole development by providing a scalable code base to build on. In the same year, another addition, the Shelley upgrade that fully decentralized Cardano went up.
In March 2021, Cardano received the Mary upgrade which introduced native tokens through the creation of a multi-asset network. The upgrade also lowered the minting and transaction fees on the network removing the need for smart contracts to mint Cardano NFTs, setting the stage for the final nail to the project, the Alonzo upgrade.
“Buy the rumor, sell the news” That old dirty trick?
The strategy of selling the news after forecasting figures or news before the release of actual data has been an old trading strategy used in trading financial markets and has now flowed into the crypto space.
It shall be remembered how a huge number of the Dogearmy hyped DOGE prior to an SNL interview with Elon Musk last year, only for the asset to dwindle, leaving a majority writhing in despair despite positive expectations. A “FuckElonMusk” coin was even minted in the aftermath to counter the Tesla C.E.O from manipulating the market.
Last week, the situation re-occurred after the El Salvador law legalizing bitcoin took effect. As opposed to people’s expectations of a collaborated surge in price even after the country doubled down on its Bitcoin holdings, price dumped, raising questions as to whether the good news is worth buying.
At press time, ADA’s price, the native token for Cardano was exchanging hands at $2.3, ticks away from its highest point of $3.10 since the June dip.
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