ADA, the ticker for Cardano cryptocurrency, the token that backs the smart-contract-enabled Cardano blockchain, saw a modest pullback on Thursday after a wild two-day rally. Since Monday’s lows below $0.35, Cardano has seen a stunning rally of nearly 18%, with ADA/USD last trading hands just above $0.4050. That’s just over 3.0% below the previous session’s highs of $0.42s, with ADA weighing in modestly as bullish short-term speculators lock in profits.
ADA’s latest rally, which hit its highest levels since early November, comes on the heels of a stunning rally seen in the cryptocurrency space, with Bitcoin jumping nearly 10% on Wednesday to hit a multi-month high above 24,500 dollars, and Ethereum. retesting multi-week highs around $1,700. Analysts attribute the growth to a reduction in short positions. This can certainly be a factor that lifts Cardano.
According to cryptocurrency derivatives website coinglass.com, short liquidations have jumped to monthly highs over the past few days. Over the past two days, exchanges have forcibly closed short positions worth more than $3.75 million, the largest being 13 January . The latest rally marks a significant break north of Cardano’s 200-day moving average, with ADA now up roughly 65% on the year.
The list of bullish tailwinds is growing
ADA’s rise is not only driven by the bullish-driven short squeeze and broader crypto market tailwinds. This is also due to a mix of recent positive headlines/developments regarding the health and development of the Cardano ecosystem itself.
Recently, Cardano supporter and Crypto Capital Venture founder Dan Gambardello opined that he thinks it unlikely that the US Securities and Exchange Commission will consider the cryptocurrency a security. He gave two reasons for this thesis; 1) Cardano’s ICO took place in Japan and was not available to US investors; 2) a judge recently ruled that secondary sales of the LBC LBRY token are not securities, setting an important precedent for the ADA.
In addition, Cardano recently underwent a major update called the “Valentine’s Update”, while Trade Value Locked (TVL) in smart contracts on the Cardano network continues to increase following the recent launch of Cardano’s algorithmic stablecoin Djed (DJED) with overprovision. , which offers investors new ways to make a profit in the Cardano decentralized finance (DeFi) ecosystem.
Analysis by crypto analytics firm Santiment also shows that there has been a significant increase in whale transactions in recent weeks – an increase in activity on the network is usually seen as a bullish sign for the cryptocurrency.
Price forecasting – will revenue increase by 50%?
Now that Cardano is back north of its 21 and 200 DMAs at $0.38 and back above $0.40, the cryptocurrency is in the midst of a key long-term resistance zone ($0.39-$0.44 zone). If ADA can make a significant breakout above this zone, especially the late October/early November highs of $0.44, then the door is open for a quick rally above $0.50 and to summer 2022 highs around $0.65.
Some analysts have identified that Cardano has recently formed an inverted head and shoulders pattern, which many are interpreting as a bullish sign.
