With a gain of more than 15% in the last 24 hours and nearly 24% over a week, the Cardano consolidates its position in the Top 5 of the most important cryptocurrencies, posting by far the best performance of this group.
Cardano (ADA) indeed hit a high of $ 1.73 on Wednesday, a threshold that the cryptocurrency has not touched since June 7. In this article, we will try to explain this sudden bullish surge in the Cardano, mainly trying to determine if the move is sustainable, and if there is still time to buy ADA.
Why has Cardano been exploding since yesterday?
First and foremost, it should be remembered that the Cardano’s rise yesterday was carried out as an extension of a bullish movement that started on July 21, after dipping to $ 1.02. In total, between that threshold and yesterday's high, ADA posted an impressive gain of over 65%.
However, it seems that this movement is primarily motivated by the prospect of a technical update of the Cardano network, the Hard Fork Alonzo.
This week, the team behind ADA – Input Output Hong Kong – indeed launched a public testnet for the meaningful integration of smart contracts, revealing that the Alonzo Purple update is imminent.
The news broke on the Input Output Hong Kong (IOHK) Twitter account earlier this week. Investors were reassured as the tweets confirmed that the team is fully aligned with the Alonzo roadmap set by the IOHK founder.
Finally, it should also be noted that the gains of Bitcoin, which was actively testing $ 46,000, also played a role in the rise in the price of Cardano.
Key bullish technical signal on the ADA
There are indeed several factors which tend to indicate that the future of Cardano should remain bullish.
First, cryptocurrency is still very far from its historic highs. Remember that the Cardano set a record at $ 2.46 on May 16, 2021. However, it is currently moving to $ 1.67, or 47% below.
But above all, several major technical signals inviting a purchase were issued yesterday, as can be seen from the daily chart below.
The graph shows in fact that Cardano broke through major double resistance yesterday, composed of the 100-day moving average, and the psychological threshold of $ 1.50.
We can indeed see that the 100-day moving average has had a close relationship with the Cardano price since the start of the summer, alternately serving as support and resistance.
The chart threshold of $ 1.50 goes back even further, and has been the scene of multiple upward and downward reversals since March.
Thus, the fact that the Cardano has managed to overcome these critical hurdles is a major buy signal in the medium to long term.
In this context, it is not excluded that the major psychological threshold of $ 2 is quickly targeted by the ADA in the coming days, although resistance can also be spotted at $ 1.80. Above $ 2, a return to all-time highs of $ 2.45 should be considered.
Finally, despite this decidedly bullish outlook, it is possible that the Cardano will correct slightly before heading back to new highs. In this context, it will be recalled that the supports of $ 1.60 and $ 1.50 should prove to be sufficiently solid to contain a possible temporary decline.