Realistic ADA/USD 2021 Price Prediction

Many of you have asked for my forecast of ADA/USD 's price at the end of this year. I have seen countless ideas here on Tradingview of ADA's price at the end of 2021. A few are realistic, but most seem overly optimistic with "to the moon!" predictions of $20, $60, or even $100.

Here I will try to make a realistic prediction, and support it by explaining my thinking about ADA's future and trend analysis. I will also share with you the key assumptions I made and some notes to help improve your strategy to avoid risk and keep gains.

Summary

• ADA is looking bullish for the remainder of the year due to the ongoing bull cycle and positive developments in the Cardano network
  
• End of year price range for ADA/USD is likely between $3.30 and $7.30 with a median of $4.70, and a bias towards the higher end of this range.
  
• Values of $10 and higher in 2021 are unlikely due to the market cap needed to support them
  
• Risks will continue and should be managed, as multiple retracements as much as 50% are possible
  

Assumptions

• The biggest assumption I make is that the current crypto bull cycle will continue through the rest of the year. I have seen speculation that we are in a supercycle that could extend beyond 2021, but my best guess is that the bull cycle will reach its peak between November and December 2021. However, I cannot rule out that the cycle will continue and reach its peak mid-2022 before going into a distribution cycle until mid 2023 to 2024. My current forecast is only until the end of 2021 for now.
  
• ADA's price as compared to other coins/tokens is irrelevant. If ETH is $1700 today and ADA gets as big as ETH, ADA will not be $1700. What matters is the market capitalization. ETH at $1700 is about $200 billion in market cap. For ADA to have the same market cap of $200 billion, ADA's price would only need to be about $6.20. This is why a price like $60 ADA is highly unrealistic. At $60, ADA would have a market cap around $2 trillion, almost twice that of BTC today, and the overall crypto market would need to be somewhere around $50 trillion to support that.
  
• If BTC were to hit 100k in this cycle, we would need a crypto market cap of at least $3-4 trillion. A market cap of $7-8 trillion seems possible in this cycle, allowing BTC to potentially peak around 200k, but such high valuations will require a massive redistribution of wealth in the global economy in the next 9 months.
  

Analysis and Forecast

• ADA/USD is current at about $1.20, with a market cap of about $40 billion. ADA appears likely to become the number 3 coin in terms of market cap as it is only slightly below BNB and Tether's market caps at this point. With ADA's upcoming smart contracts, NTF suppot, and ADA's lower transaction prices (as compared to ETH's very expensive prices), ADA has many things going for it that will not only help it grow with the bull cycle, but may see a significant number of users, investors, and institutions switch from ETH to ADA.
  
• ADA reaching a market cap equal to ETH's current $200 billion could be likely if BTC tops $100k and ETH approaches $10k. At such a valuation, ADA/USD would be around $6.
  
• Looking at the trend analysis of the 3D charts we see a range of possibilities:
  - The minimum we might see is $0.21, but this is not likely unless there is a collapse of Cardano, crypto, or a cataclysmic event.
  - The yellow basis line is just above where ADA prices have risen so far in 2021. ADA is currently around the green Lower High trendline. If ADA continued to trade at the current level until the end of the year, ADA would reach about $3.30
  - Had ADA not consolidated in March (as it typical for many assets in the month of March), ADA would have likely reached the yellow basis line by now. The yellow basis line is the most likely scenario for ADA in the current forecast, reaching about $4.70 by the end of the year. However, there is potential to continue up to the green Upper Low.
  - Above the basis is the green Upper Low. I expect this to be the upper bound of likely outcomes, with a year-end price of around $7.30. At that level, ADA's market cap would be almost 20% higher than ETH's market cap today. We may see peaks above this, but perhaps not sustained prices above this trendline.
  - Higher and lower prices are possible, indicated by the red trend lines, but these are much less likely
  
• Overall, ADA/USD appears likely to generally trade in the range between the lower and upper green trend lines unless there is a significant shock to the crypto market (e.g. USA outlawing Bitcoin). Again, this assumes that the current bull cycle continues until the end of 2021.
  

Notes:

• Prices do not follow trend lines. Trend lines are the result of where prices have been moving over long timeframes. Trendlines may show probabilities, but are not certainties.
  
• Trend lines suggest prices in the future, but are not exact. Even if a price target coincides with a Fibonacci and/or psychologically important level does not mean that prices will touch that exact price. Price targets are a region around a price point
  
• In 2020 ADA had four to six major retracements. Additional retracements as much as 50% should be expected by year end.
  
• If you want to limit risk and keep your gains, have an investment and trading strategy that manages risk and fits your situation and goals. For example, it is very often better off HODLing than frequently trading (read Nassim Taleb's books for evidence of this). If you trade frequently, consider putting a large portion (50-70%) in HODL so that you do not miss out on the gains over time
  
• Finally - Be Patient - wait for confirmation of reversals and strong, clear signals. You not always need to be in a trade. Do not give in to FOMO, you will only lose out.
  

Good luck and good fortune!