Cardano’s native coin ADA has seen many rallies since the start of this year. The token owes its performance to the improving economic condition in the market and the ongoing developments on the Cardano Network.
Over the past seven days, ADA has observed more than a 15% price gain in 7 days and an over 17% 14-day gain. But what are the possible reasons for ADA’s impressive performance?
What Is Contributing To ADA’s Price Rally?
The hype around the upcoming Djed stablecoin launch, among others, has played a part in driving ADA price up over the past weeks in January. According to COTI developers, the network behind the Djed stablecoins, ADA holders would receive extra rewards when they mint Djed by staking their ADA coins. This information might spur users to buy more ADA and could further push the coin price.
Also, the Cardano community is anticipating upcoming launches that would enhance the network and Smart Contract capabilities. Furthermore, Cardano has received a new improvement proposal known as CIP-30. This improvement proposal would allow the integration of web-based wallet bridges that would promote interaction between Cardano wallets and Web2 platforms like Amazon.
It would allow ADA more use cases and adoptions and ensure increased growth for Cardano, positioning it to meet more market needs. This development could be among the factors fuelling ADA’s price gain.
Another new development on the Cardano network that might be fuelling the ADA price rally is the eTukTuk automotive project launch. According to the announcement, the Cardano blockchain would be hosting the project.
The project allows users to earn rewards using the eTukTuk electric vehicle charging infrastructure. Users can access the service using TUK, eTukTuk native token, but they need to hold ADA since the project anchors on Cardano. That also could be boosting ADA prices upward.
ADA Price Outlook
The Cardano cryptocurrency, ADA, has gained over 6% in the last 24 hours. ADA hit an eleven-week high of $0.384 on January 22 before taking a hit over the past 48 hours. Its price dropped 6.4% on the day while retracing its support levels.
However, ADA is currently trading at $0.3833 with a 24-hour high of $0.3866 and a low of $0.354580 after declining over the last six hours. The reversal could present a chance for the bulls to accumulate tokens in anticipation of Djed launch, which might push the ADA price forward.
From the technical view, ADA is showing a buy signal. The oscillators fluctuate between neutral and buy, and the Moving Averages show a strong buy signal.
The token’s price is currently hovering at $0.3833, representing a 6.43 % increase in its value in 24 hours. It has broken above its 50-day Simple Moving Average, indicating a short-term bullish sentiment for Cardano. However, it is below its 200-day SMA, meaning the asset price can become bearish in the coming weeks.
The current support levels are $0.324253, $0.335986, and $0.354289, while the resistance levels are $0.384326, $0.396059, and $0.414363. ADA will likely not surpass the $0.384326 level in the coming days since the bears are sustaining their charge.
The Relative Strength Index (RSI) is at 68.39, close to the overbought zone. However, a retracement can occur anytime soon. The Moving Average Convergence/Divergence (MACD) is above its signal line but shows convergence, which is a bearish signal. Expect the price of ADA to record slight gains before retracing to the $0.36 price level in the coming days.
But note that altcoins are volatile and sometimes deviate from predicted trends. Also, an altcoin that loses half its value (50%) must rally to (100%) to return to its original value. Traders with risk management techniques for volatile markets can utilize the opportunities to profit.
Featured image from Pixabay and chart from TradingView.com