Why is Cardano (ADA) price up today?
2024.07.08 16:37
Cardano (ADA) had a strong start to the week, rising 2% over the last 24 hours to trade at $0.3725 on July 8. This price growth has seen ADA recoup all the losses made on Sunday, July 7, citing a shift in investor sentiment toward the layer-1 token.
ADA/USD daily chart. Source: TradingView
ADA’s rise is against the bearish cloud that continues to engulf the wider crypto market. For instance, Bitcoin (BTC) and Ether (ETH), the top two cryptocurrencies by market capitalization, have dropped by approximately 1.89% and 0.79%, respectively.
Let’s look at the bullish catalysts driving ADA price up today.
Cardano founder reveals Chang Hard Fork Is ‘basically there’
ADA’s gains today follow the Cardano founder Charles Hoskinson’s update on the Cardano’s progress and the upcoming Chang hard fork. Speaking in an Ask Me Anything (AMA) session on July 7, Hoskinson described the ongoing efforts and milestones, adding that the Cardano Chang Hard Fork is almost ready.
Reflecting on the challenges and achievements the Cardano ecosystem has been through over the past years, he acknowledges that “it’s been a very long last few years,” noting that despite getting “jammed up in a few things,” the ecosystem has managed to overcome these obstacles, particularly in governance.
Hoskinson highlighted the completion of all elements of CIP 1694 as an important accomplishment, taking about two years to finalize but essential for Cardano’s architecture.
At the core of Hoskinson’s update was the announcement that node 9.0, which is essential for the Chang hard fork, is nearly complete.
“What’s exciting about node 9.0 is it’s the Chang Hard Fork, It’s basically there.”
The Chang hard fork represents an important upgrade for the Cardano ecosystem. According to Hoskinson, it is expected to initiate the transition to the Voltaire era, marking the final stage of its road map to create a fully decentralized blockchain ecosystem, which has been “two years in the making.”
Historical performance hints at the potential for a significant rally in ADA’s price ahead of the upgrade. According to IntoTheBlock, ADA saw a significant spike in the run-up to its last major upgrade in 2021, increasing by 130% from $1.35 to $3.10 within a month.
Source: IntoTheBlock
This historical performance has raised expectations that the upcoming Chang hard fork could similarly catalyze a significant price rally for ADA, explaining today’s price action.
Cardano network growth
ADA’s upside potential coincides with the growth the Cardano network has experienced over the last month. Data from IntoTheBlock shows that the number of active addresses on the Cardano blockchain has increased from 21,560 on June 17 to the current value of 36,700. Similarly, new addresses have climbed from 6,110 wallets to 10,420 over the same period.
Addresses on the Cardano network. Source: IntoTheBlock
Additional data from IntoTheBlock reveals that addresses holding 10 million-100 million ADA have risen from 356 addresses in early February to approximately 400 at the time of publication.
Cardano supply distribution among addresses holding 10M to 100M ADA. Source: IntoTheBlock
This suggests that the 10 million-100 million ADA holders have been stepping up their buying in 2024, asserting their confidence in the long-term potential of the token’s price.
That is further visible in the net capital flows across crypto asset funds last week. Cardano funds received $100 million during the week ending July 5, bringing the year-to-date inflows to 9 million, according to CoinShares weekly report.
Flows by asset. Source: CoinShares
ADA’s bullish divergence
ADA’s rise today precedes a period of growing bullish divergence between its price and the relative strength index (RSI).
Notably, ADA’s price dropped between June 17 and July 7, forming lower lows. But, in the same period, its daily RSI ascended, forming higher lows.
ADA/USD daily chart. Source: TradingView
As a rule of technical analysis, a divergence between falling prices and rising RSI indicates strength in the prevailing uptrend, prompting traders to buy more at local dips.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
