Cardano, known by its symbol ADA, displayed a robust performance at the beginning of the week, registering a 2% increase in the last 24 hours to reach a trading value of $0.3725 on July 8. This surge in price enabled ADA to recover from the losses incurred on July 7, attributed to a change in investor sentiment towards this layer-1 token.
ADA's positive movement stands out amidst the prevailing bearish trend that looms over the broader cryptocurrency market. Notably, Bitcoin (BTC) and Ethereum (ETH), the leading two cryptocurrencies in terms of market capitalization, experienced declines of around 1.89% and 0.79%, respectively.
Exploring the factors contributing to ADA's price upswing today:
Insight into Cardano's Recent Growth
The hike in ADA's value follows an update from Cardano's founder, Charles Hoskinson, regarding the project's progress and the imminent Chang hard fork. During an Ask Me Anything (AMA) session on July 7, Hoskinson provided insights into the ongoing developments and milestones achieved, highlighting the near-completion of the Cardano Chang Hard Fork.
Reflecting on the journey of the Cardano ecosystem over the past years, Hoskinson acknowledged the challenges faced, mentioning a prolonged period of hurdles that the ecosystem successfully navigated, particularly in terms of governance. He emphasized the significance of finalizing all components of CIP 1694, a process spanning approximately two years but crucial for Cardano's infrastructure.
Central to Hoskinson's update was the revelation that node 9.0, integral for the Chang hard fork, is nearing completion. This hard fork signifies a pivotal upgrade for the Cardano ecosystem, slated to mark the transition to the Voltaire era, a milestone marking the final stage of its roadmap towards establishing a fully decentralized blockchain ecosystem, a journey that has spanned two years.
Historical performance indicators hint at the potential for a substantial rally in ADA's price leading up to the upgrade. Notably, prior to its last significant upgrade in 2021, ADA witnessed a notable upsurge, escalating by 130% from $1.35 to $3.10 within a month.
Expansion of the Cardano Network
The optimistic trajectory of ADA aligns with the growth observed in the Cardano network over the past month. Data from IntoTheBlock reveals a spike in the number of active addresses on the Cardano blockchain, surging from 21,560 on June 17 to the current figure of 36,700. Additionally, new addresses have climbed from 6,110 wallets to 10,420 during the same period.
Further data analysis indicates a rise in addresses holding 10 million to 100 million ADA, underlining increased buying activity by holders in this range, signifying confidence in the token's long-term value.
Additionally, recent capital flows across crypto asset funds portray a positive outlook for ADA, with Cardano funds attracting $100 million in the week concluding on July 5, contributing to year-to-date inflows amounting to 9 million.
ADA's Positive Divergence
ADA's recent price surge precedes a period characterized by growing bullish divergence between its price and the relative strength index (RSI). Despite a decline in ADA's price from June 17 to July 7, forming lower lows, its daily RSI exhibited an upward trend, forming higher lows.
According to technical analysis principles, a divergence between falling prices and rising RSI signifies strength in the prevailing uptrend, urging traders to consider buying opportunities during temporary price corrections.
This article refrains from offering investment advice or recommendations. Each investment decision carries inherent risks, and readers are encouraged to conduct thorough research before making investment choices.
