ADA, the token that powers the smart-contract-enabled Cardano blockchain, has been surging on Tuesday. The cryptocurrency, the world’s eighth largest by market capitalization according to CoinMarketCap, was last up around 8.5% on the day, with ADA/USD changing hands in the $0.39 area, giving it a market cap of around $13.5 billion.
ADA is getting a lift from a broader rally being seen across the crypto space – Bitcoin was last up 1.7% and Ethereum around 3.0% on Tuesday, with traders relieved that the latest US inflation numbers, while still hot, weren’t as bad as some had feared. Cardano’s latest rally has seen it rebound more than 13% from earlier weekly lows in the $0.34s, with the cryptocurrency now slightly above its 200-Day Moving Average once again.
Cardano Outperforms Amid Multiple Bullish Tailwinds
While most cryptocurrencies are trading with reasonable gains on Tuesday, Cardano is outperforming and is the best performer in the top 20. Analysts have pointed out a few bullish developments relating to the Cardano blockchain and ecosystem that could be powering this outperformance.
Firstly, Cardano is set to implement a major upgrade on Tuesday called the “Valentine upgrade” that will introduce new Plutus SECP cryptographic primitives to the blockchain. According to Input Output Global (IOG), the company responsible for Cardano’s development, the upgrade is designed to “foster secure cross-chain DApp development with Plutus, while advancing blockchain interoperability”.
Elsewhere, Cardano’s new USD-pegged stablecoin Djed, which was created by IOG and Coti and launched on the blockchain a few weeks ago, continues to see impressive growth. There is now a circulating supply of 2.239 million DJED, backed by 30.89 million worth of ADA tokens, which have a current market value of around $12 million. That means a collateralization ratio of around 540%, according to the Djed website.
New yield-generating possibilities thanks to Djed within the small but growing Cardano Decentralized Finance (DeFi) ecosystem has helped Cardano’s Trade Value Locked (TVL) more than double to around $130 million as of Tuesday since the start of 2023. Cardano’s TVL is still small – Cardano ranks as the 28th cryptocurrency by TVL. But growth is promising and Cardano may well start climbing the TVL rankings soon as Djed garners further inflows.
Some analysts are speculating that a sign that these increased inflows might be coming can be seen in on-chain data presented by crypto analytics firm Santiment. According to a recent blog post by the firm, ADA has seen a massive uptick in whale transactions since the start of February. So far this month, there has been a daily average of 1700 transactions with a USD value of $100,000 or more, up from only around 300 in January.
Where Next for Cardano (ADA)?
If ADA can hold to the north of its 200DMA, this opens the door to a retest of earlier monthly highs in the mid-$0.41s. ADA would then face significant resistance in the $0.4250-$0.44 area, but if the broad crypto rally and positive trends within Cardano’s DeFi ecosystem continue, then a break above this area and a push back towards $0.50 shouldn’t be ruled out.
Experts Give Their ADA Price Predictions
Crypto-focused YouTuber Mind Math Money thinks that the more times that Cardano tests resistance in the $0.4250-$0.44 area, the more likely it becomes that the cryptocurrency can break to the north. If ADA can muster a strong daily candle stick close above this area, then Cardano can push quickly towards $0.68, he continued, citing a lack of resistance in the interim to prevent the move. In the longer term, Mind Math Money thinks that Cardano is likely in a trend to move back above $1.0, which he says was a key long-term area of resistance in the pastIs It Too Late to Buy ADA?
Asking whether it’s too late to buy an asset is never the right question. The answer is always never. The right question is whether an asset should be bought or not. And that depends on how an investor judges its long-term price performance outlook.
If you deem ADA as likely to rise substantially in price in the current years, based on your own research, it is probably worth buying some. If not, then stay away.
ADA Alternatives to Consider
As discussed above, ADA’s near-term outlook is looking pretty good. But traders should nonetheless always be looking to diversify and might want to consider other high-potential tokens, such as those being sold in pre-sale by promising up-and-coming crypto projects. We’ve reviewed some of the best candidates in this list of the top 15 cryptocurrencies for 2023, as analyzed by the CryptoNews Industry Talk team.
This article was originally published by cryptonews.