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ADA has experienced a 6.4% decline from its monthly peak of $0.62, correcting downwards. Following the correction, whale addresses have increased.
Cardano (ADA) has seen a significant drop in the last two days of trading, effectively reversing all the gains earlier in the week.
According to CoinMarketCap data, the eighth-largest asset dropped 6.4% from its monthly peak of $0.62 on February 20. In the past 24 hours, the coin has shown minimal movement, leading to a decrease in trading volume.
Analysis of Santiment data by AMBCrypto indicates that, at the time of writing, market sentiment towards the coin is negative, highlighting the impact of the recent correction.
Is the future challenging for ADA?
Popular technical analyst Ali Martinez identified a sell signal on ADA's 3-day chart, amplifying bearish sentiments. Martinez cautioned, "It's worth noting that the last two times this indicator showed bearish, ADA went through a price correction."
While predictions from experienced individuals can hold value in investing, it is essential to conduct your research (DYOR) before making further investment decisions.
AMBCrypto examined additional technical indicators to validate the aforementioned claims.
ADA faces a pullback after the Relative Strength Index (RSI) touched the overbought level of 70. Since then, buying pressure has significantly eased. However, as RSI is still above the neutral 50 at the time of writing, it may be too early to definitively signal a bearish trend for ADA.
The Moving Average Convergence Divergence (MACD) line is on the verge of a bearish crossover with the signal line, suggesting it might be time to sell.
Whales seizing the opportunity
Interestingly, ADA whales appear to be capitalizing on this correction to fill their coffers. Santiment data shows that addresses holding over 1000 coins have increased since February 2.
Among all bearish indicators, this is a strong statement favoring ADA in the medium to long term. The European Data Act, effective since January 2024, imposes far-reaching requirements that may compel smart contract developers to adhere to strict regulations, such as terminating real-time smart contracts even in cases of immutability, making any changes impossible.
Article 30 of the Data Act states, "Secure termination and interruption—Ensure the existence of mechanisms to terminate the continued execution of transactions. Smart contracts should include internal functions that can reset or instruct the contract to stop or interrupt operations to avoid future (unexpected) executions."
Essentially, the Data Act prohibits immutable smart contracts, stifling genuine blockchain applications. This could signify a dawn of a dark day for the European cryptocurrency industry, as last year saw an optimistic outlook for the cryptocurrency market.
If lawmakers do not rectify their mistakes promptly, the stringent regulations in the Data Act could lead to a brain drain in the cryptocurrency talent pool.
The Data Act mandates the establishment of a mechanism to securely terminate or interrupt smart contracts, a fatal switch for blockchain-based applications.
This fundamentally contradicts the essence of blockchain innovation.
Smart contracts are designed to avoid intervention and potential termination by authorities. After all, that's the whole point of having no intermediaries.
This termination switch is also a single point of failure, potentially introducing additional exploitation risks and posing a severe risk to user funds.
It's a disaster for cryptocurrency.
While the official purpose of the Data Act is to eliminate barriers to data access, it creates barriers to access in the context of blockchain—discussing unforeseen consequences.
That's right—the Data Act achieves the opposite of what it plans.
In addition to categorizing smart contracts as illegal, the law does not clearly define smart contracts or the circumstances under which authorities can demand their termination.
It's a heap of uncertainty that should make the European blockchain industry very, very nervous. The cryptocurrency industry has a responsibility to clean up this chaotic situation.
Underestimating the immutability of blockchain is stifling innovation. Immutability is how blockchain ensures the integrity of data on the ledger.
Information added to the blockchain should ideally be immutable so that no entity can manipulate, replace, or forge data on the network. But EU legislators choose to overlook this innovation.
The immutability of public blockchains enhances trust in the system, reducing the time and cost of audits. It is a fundamental feature of any true blockchain.
Businesses, in particular, should desire immutability, as it provides the data integrity they need.
Through the immutability of blockchain, organizations can prove to stakeholders that certain information is accurate.
Verified transaction ledger histories enhance the ease and efficiency of the audit process.
Use cases arising in this field include supply chain management, financial disclosure, and identity management.
Blockchain-based immutability can address many data issues that businesses face.
One of the advantages of blockchain technology is that it preserves the complete history and data trace.
The integrity of blockchain can be proven at any time by recalculating block hashes, allowing organizations and regulatory bodies to detect fraud, among other things.
The entire cryptocurrency industry in Europe must unite against Article 30 of the Data Act, as it has the potential to freeze the entire cryptocurrency industry through backdoor means.
The immutability of blockchain must be defended at every turn, and the European cryptocurrency industry bears this heavy responsibility.
Kadan Stadelmann is a blockchain developer, operational security expert, and Chief Technology Officer of the Komodo platform. His experience includes operational security work in government departments, founding tech startups, application development, and cryptography. |
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Post time 2-3-2024 12:26:51