Key Points
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Cardano’s founder Charles Hoskinson said ADA was in a bear market on Monday.
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He bemoaned the fact that no announcement would make a difference given current conditions.
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ADA’s recent pain comes as the broader cryptocurrency market comes under intense selling pressure.
“It’s called a bear market,” founder of the Cardano blockchain and former co-founder of the Ethereum blockchain Charles Hoskinson said on Twitter on Monday in response to a tweet referencing the continued fall in ADA’s price. ADA is the native token on Cardano’s blockchain.
Hoskins had posted a tweet with a GIF of a man openly expressing his pride, with the tweet reading “That feeling you get when you’ve gotten all the fundamentals right and your protocol keeps getting faster, more decentralized, community growth, and continues to be the most advanced technology.”
In reference to ADA’s bear market, Hoskinson said, “That’s what happens… Nothing changes it… No announcement makes a difference.”
Hoskinson then went on to jokingly bemoan the fact that Cardano could perform a variety of miracles and it would still fall as part of the broader cryptocurrency bear market.
ADA/USD was last trading around $0.69 per token, down about 7.0% on the day and at its lowest since January 2021.
Since its mid-April highs of just under $1.25 per token, ADA has lost about 45% of its value. ADA/USD has more or less been in constant decline since it hit record highs above $3.0, last September. At current levels, the drawdown from record highs is now around 77%.
ADA suffers amid broader crypto market pain
Since early April, cryptocurrency markets have been under intense selling pressure.
Concerns about the response of major global central banks to elevated inflation, a weakening global growth outlook plus concerns about geopolitics have weighed heavily on US and global equities, in recent weeks.
Cryptocurrency markets currently have a close correlation to equities, which goes a long way to explaining the recent bearishness.
Another key factor is the ongoing and still accelerating surge higher in US (and global) bond yields, as bond markets pricing in a higher inflation profile and more aggressive monetary policy tightening response from major central banks like the Fed.
The US ten-year yield surged above 3.2% on Monday, its highest level since December 2018, taking gains in the last three months to about 140 bps.
Higher yields raise the “opportunity cost” of holding assets that don’t offer yield, like cryptocurrencies, precious metals, or so-called growth stocks with a high valuation but still poor earnings.