If you're a contrarian investor, now could be the perfect time to find some beaten-down cryptos that are trading well below their all-time highs. What you should be looking for are cryptos that have been unfairly punished as a result of a broader market sell-off. When people panic and sell, they literally sell everything, and that creates some unique buying opportunities, especially in the lower end of the market.
Take Cardano (ADA +1.62%), for example. Cardano is now trading at $0.51, more than 80% off its all-time high of $3.10 reached last September. This is exactly the type of crypto that we're looking for -- it's outrageously cheap as a result of having been beaten down with the broader market and doesn't need to do much to provide a nice return. But does Cardano have enough to double in price to the $1 mark?
Buy the upgrade
The first factor in Cardano's favor is that there appears to be a direct correlation between major tech upgrades and rallies in the price of Cardano. Take a quick look at the price chart for Cardano. Ahead of the Mary upgrade in March 2021, Cardano rallied. Ahead of the Alonzo upgrade in September 2021, Cardano rallied. And guess what? Cardano is nearing the launch of another major tech upgrade, known as the Vasil hard fork. This upgrade was originally scheduled to be completed in June, which is why we saw signs of a brief rally in Cardano at the beginning of the summer. But the timetable for the upgrade has dragged on, and it now appears to be scheduled for sometime in August. That could be a perfect catalyst for Cardano to start moving upward in price.
Image source: Getty Images.
Buy the ecosystem
Another factor in Cardano's favor is that it has finally started to show signs of a vibrant, robust ecosystem in which developers are actually building things on top of the Cardano blockchain. This has always been the major complaint about Cardano. The blockchain is so focused on a peer-reviewed, research-driven development process that it has always been much slower than other blockchains to introduce new capabilities and functionality. Take smart contracts, for example. It was only in September 2021, with the Alonzo upgrade mentioned above, that Cardano finally got around to offering smart contract functionality.
CRYPTO: ADA
Key Data Points
As a result, sentiment in the crypto community has always been very mixed on Cardano. On the one hand, you have the people who are impressed by Cardano's wonderfully stable, secure, environmentally friendly, and very efficient blockchain. On the other hand, you have people who say that the entire blockchain is pure vaporware (meaning it doesn't do anything of real utility and is still just a concept).
There are certainly some promising signs here. Cardano now claims that there are nearly 1,000 projects running on the blockchain and that the pace of development has picked up. There have also been some recent success stories, such as the rapid growth of the non-fungible token ecosystem. With the new tech upgrade this summer, Cardano promises that we will see even more activity around decentralized applications and smart contracts, so that could be another catalyst helping Cardano's price to rise.
Buy the dip
Finally, there is a very high probability that the eventual return of investment dollars to riskier crypto assets will spark a rally in the price of Cardano. The price of Cardano should track the broader crypto market, given that it is a top-10 cryptocurrency by market capitalization and is one of the best-known crypto names in the marketplace. It is not out of the realm of possibility that any rally in the price of Bitcoin (BTC +0.65%) will also lead to a rally in Cardano. A rising Bitcoin tide tends to lift all boats.
Cardano is a bargain-priced crypto that has continually shown the ability to release new tech upgrades and expand its developer ecosystem. Just 12 months ago, Cardano was trading at over $3, so a move from $0.51 to $1 certainly seems like a plausible scenario given all the catalysts now in place.
