Four Reasons Why Cardano’s ADA Price is Surging
Cardano’s cryptocurrency ADA has been on a tear this month, doubling in price since the start of February and now trading at 0.76 according to CoinMarketCap—here are four reasons why the ADA price is surging.
Smart contract functionality imminent, a move to community control, new government deals in Africa, and a raging crypto bull market are four reasons why Cardano’s native cryptocurrency ADA has increased over 100% since the start of February.
While the entire Altcoin market steadily rises it's easy to overlook Cardano’s ADA as being another cryptocurrency being boosted by market FOMO and the overwhleming bullish sentiment—and while it is certainly one reason, the ADA price rally is mostly fueled by the major developments inside IOHK and a number of hugely important releases planned for this year.
Cardano’s Goguen Era is nearly Upon Us
Mary is one of two hard forks planned for Cardano’s upgrade from Shelley to Goguen. The hard fork was successfully executed on February 3rd at 20:00 UTC and is set to finally bring native asset support to Cardano, a move that will allow the blockchain to properly support decentralized finance (DeFi) and decentralized applications (Dapps).
DeFi and Dapps are the markets that Ethereum and rival smart-contract blockchains like Cardano are targeting. In its current state, the DeFi space is intrinsically linked with Ethereum, with vast majority of DeFi protocols running on its blockchain.
The Mary hard fork is a major upgrade that unlocks a whole new world of opportunities both to the Cardano community and the businesses and institutions using the blockchain. This will effectively transform the Cardano testnet into a truly multi-asset network, enabling users to issue and distribute their own tokens on the Cardano blockchain.
By March, the same upgrade will roll out to the Cardano mainnet, unlocking the blockchain’s smart contract functionality.
The market reacted strongly to the upgrade, as Cardano is one of the few, if not the only blockchain platforms, that handles tokenization natively. The Cardano design is also touted as superior to Ethereum’ as it removes a layer of complexity as its native tokens will be able to transact directly on the blockchain the same way that ADA does. Ethereum’s native tokens must leverage smart contracts on top of the network’s base layer.
Handing Control to the Community
IOHK, the company behind Cardano, is set to give up all control over block production on the network on March 31st—currently 100% of the blocks on the Cardano network are produced by IOHK.
From March 31st the Cardano network will become fully community-controlled which means that the blockchain will become completely decentralized and fulfill the promise of blockchain and intermediary free financial processes. The move towards true decentralization has also been a major factor instilling confidence in Cardano’s supporters and is no doubt an attraction to new users and a factor that is seeing ADA reach for its all-time highs.
IOHK Bringing ADA to Africa
Charles Hoskinson, the CEO of IOHK, revealed late last year that the company was working on a number of projects involving Cardano aimed exclusively at Africa.
In a recent interview with the Proof of Africa, IOHK’s director of African Operations John O’Connor revealed that the company was in the final stages of a large government contract in Africa. When launched, the project could onboard millions of new users onto the Cardano platform and become one of the largest real-world implementations of blockchain technology.
While details are set to be release at the end of the month—O’Connor revealed that the African project should realistically onboard 100 million users onto its platform within the next couple of years.
Another bullish signal for Cardano advocates, which is helping ADA rally higher.
ADA Price Analysis
Source: ADA/USD TradingView
According to the 4-hour price candlestick chart, it can be seen that the ADA price is currently in an ascending channel, and the latest 4-hour candlestick chart prices have closed above 9-day Moving Average and the exponential moving average ribbon. A series of exponential moving averages of different lengths present a long arrangement. it helps confirm a rising price trend.
From the candlestick chart, it can be seen that a Doji Candlestick pattern was closed in the short-term downward trend (wave 4) at 8 AM and 12 AM on February 9th, indicating that the trend would reverse and touch the lower support line of the ascending channel—where it bounced immediately showing the strong buying power in the market. As can be seen from the figure, the green candlestick was received afterward, and the trading volume continued to expand, indicating that the fifth wave of upward price movement was confirmed.
According to the Elliott Wave Principle, as shown in the figure, we find that highs continue to create higher highs, and lows continue to close higher. ADA is currently in the upward channel of the fifth wave, which will create a short-term price peak higher than $0.85. Investors need to pay attention to the candlestick pattern especially when it is closer to the pressure line of the upper upward channel. If the trend changes, there will be a short-term 3-wave (wave A; wave B; wave C) correction.
Source: ADA/USD TradingView
Looking at the MACD chart—the MACD line(blue) and the signal line(yellow) have merged together and are above the zero axes. And the transaction volume (red) has gradually decreased, which indicates in the following 4 hours, there is a huge possibility for forming a golden cross. This is a short-term bull market phenomenon.
Based on the four reasons above and the technical analysis of Cardano's cryptocurrency, we believe ADA will continue to rise and close above $0.80 today with further price gains in the days to come.
Image source: Shutterstock
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