Cardano’s ada token has enjoyed some bullish activity lately, reaching its highest in over a month today.
The digital currency climbed to as much as $1.10 around 12:30 p.m. EDT, CoinDesk data shows.
At this point, it was trading at its loftiest value since February 16, additional CoinDesk figures show.
Since then, the cryptocurrency has pulled back slightly, but it has retained most of its recent gains by trading at $1.07 at the time of this writing.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Following ada’s latest price fluctuations, several market experts weighed in, pointing out key fundamentals affecting the digital asset’s price and important technical levels that traders should watch.
Ben McMillan, CIO at IDX Digital Assets, emphasized some important developments that have coincided with ada’s recent upside.
“After a long time in the making, Cardano has finally seen a massive uptick in projects being developed on its blockchain,” he stated.
“It’s also worth noting that Cardano has the highest allocation in Grayscale’s new ‘Smart Contract Platform Ex-Ethereum Fund,’” said McMillan, referring to the investment vehicle announced yesterday.
The fund will focus on digital assets tied to blockchain platforms, other than Ethereum, that leverage smart contracts.
However, he noted that “this recent bounce is on relatively low volume and is coming after Cardano started the year at over $1.50 (and peaked at over $3 in 2021).”
“So this looks to be a combination of technical bounce from oversold levels on the back of encouraging developments regarding the longer-term outlook.”
“The key will be if it can hold the psychological $1 level from here on,” McMillan concluded.
William Noble, the chief technical analyst of research platform Token Metrics, also chimed in, emphasizing some important technical levels.
“Cardano is making a long term bottom similar to the one it made in January of 2021. If Cardano holds above a support at 1.03, then ADA can easily travel to the next resistance point at 1.17,” he stated.
“Cardano seems to be shifting from base building to trending. If ADA continues to rally, 1.45 may be the next big-picture objective.”
“ADA maximalists would need to see ADA above that level in order to discuss an upside target above $3.”
Ben Armstrong, founder of BitBoy Crypto, also offered technical analysis, highlighting different levels.
“After finding support at .78 ADA/USD has risen almost 40% breaching the strong psychological resistance of 1.00,” he stated.
“ADA is finding resistance at 1.08 which is also a golden pocket from the lows of march 2020.”
Armstrong noted that if the digital asset can break through this accumulation of selling interest, it will probably encounter its next area of major resistance at $1.56.
However, should it fall back, it will encounter “key support at the .702 Fibonacci level coming in at .93.”
Mark Elenowitz, co-founder of Ethereum-powered exchange Upstream, spoke to key variables affecting ada’s price action and commented on the digital currency’s outlook.
“Cardano’s breakout today is reflective of bullish glimmers in the crypto market,” he stated.
“Cardano also has a base of supporters who are especially devoted to the project and therefore willing to risk significant amounts of capital to it,” said Elenowitz.
“The biggest factor driving this price movement is that Cardano just saw a big influx of tokens into staking pools,” he stated.
“Once traders saw this influx they appeared to have started buying in relatively large numbers. Naturally, the price surged and might continue to do so if this apparent micro rally continues.”
“That being said, there is always the question about the use cases available on the Cardano Network – after all, it’s been slow to implement smart-contract utility and so questions abound about whether it can keep up with such competitors as Solana, Avalanche and Terra,” Elenowitz noted.
“If Cardano Network doesn’t experience much demand because of a relative lack of utility, then it’s safe to say that price action for $ADA could easily go south – and quickly,” he warned.
Elenowitz identified some important technical levels that traders should watch.
“Cardano went up nearly $0.5 during its last big breakout, before crashing back down, and the current move upwards seems equally strong.”
“So it’s not beyond the realm of possibility that it could continue moving upwards, perhaps anywhere from $1.25 to $1.30, before hitting major resistance,” he stated.
“For the medium term, I think $ADA has strong support at $1 and is likely to hold there.”
“But in this volatile market, it seems like anything above this level is unsustainable.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.
Forbes – Crypto & Blockchain