Is the price of Cardano at risk due to the Ethereum upgrade?
Cardano could be at risk of a correction, as it has historically suffered drops following an Ethereum upgrade.
The Pectra upgrade of Ethereum not only worries investors in the mentioned cryptocurrency but also poses risks for Cardano. Historically, the price of ADA has fallen after an ETH upgrade, according to Muthoni at Coingape.
Pectra launches today, May 7, and Cardano was defying the odds with a 2% intraday gain. However, will history follow its course and force ADA to plummet and possibly lose the crucial support of $0.66?
Why does the price of Cardano face pressure from Ethereum's Pectra?
The battle between Cardano and Ethereum for dominance has lasted for years, considering that both are among the oldest layer one networks in the cryptocurrency industry. This battle has often led ADA to face bearish pressure whenever improvements are implemented in the Ethereum network to enhance its scalability and use.
For example, the price of Cardano recorded its largest correction in 2021, following the London upgrade, which introduced a mechanism to burn part of the transaction fees and increase ETH's deflation. In 2022, ADA also fell after Ethereum's merge, which transformed the network from proof of work to proof of stake.
The most recent ETH upgrade occurred early last year, when Cardano suffered a 65% drop after Dencun. If history repeats itself and the upcoming Pectra upgrade triggers a drop for this ETH rival, the price of ADA is at risk of a sharp bearish trend.
