Cardana ADA just touched its yearly high, increasing confidence in the investors. When this month began the price of ADA was around $0.32, and two weeks of high on-chain activity made it surge around 137%, reaching $0.81 as of today.
The surge is believed to be accelerated by the potential partnership of Cardano with Ripple and the release of its sidechain Midnight. This article will dig deeper into the reasons behind this soar and forecast how this will affect the price in upcoming months. Additionally, we will also check the factors that may limit its bull run.
Reasons Behind ADA’s Surge
The majority of investments are from whales rather than small-scale investors. This signifies the institutional interest in the coin. Also, the release of the Midnight blockchain and the Ripple Cardano partnership aided the rally. Let’s check each in detail.
Whale Accumulation
The on-chain data shows that the whale activity of ADA has increased dramatically over the past two weeks. Analysts believe that this accumulation is from institutional investors looking for long-term gains. Hodlers now hope for another wave of institutional investors who can navigate the coin to $1.
Ripple Cardano Partnership
The rumor about a Ripple and Cardano partnership is one of the major reasons for this surge. The speculation stems from the recent interactions between Ripple CTO David Schwartz and Cardano founder Charles Hoskinson. The rumor was further fueled by Hoskinson’s remarks about XRP in a recent AMA.
Midnight’s Arrival
Hoskinson claimed that ADA can add amazing DeFi components to XRP, specifically through the integration of Midnight, a blockchain project focused on privacy. Midnight, which is in its test phase, was one of the major topics in Hoskinson’s AMA. He signaled an upcoming airdrop of Midnight’s foundational coin NIGHT, where there are high chances for ADA holders to become eligible for the drop. This also contributed to the uptrend.
ADA Price Forcast
ADA’s price in recent years indicates that at least a 100% increase is guaranteed. The technicals also indicate “Buy”. The RSI (Relative Strength Index) of 83.91 is neutral. However, the Moving Averages suggest a strong buy.
With increasing market sentiment, ADA is expected to grow through this month to $1. Then we will see a reversal. However, there are high probability for a reversal before it reaches $1. Let’s discuss that in detail.
What Holds ADA Back? The Chances For a Reversal
Some of the chart analyses, especially the MVRV Ratio, indicate that the currency is overvalued. The MVRV ratio has crossed the danger zone of 20% and moved to a more alarming 37%, generating serious concerns among investors. Various analysts expressed their pessimistic view on the coin by predicting a huge decline in the coming months.
Despite the issues with the overvaluation, ADA is around 12.78% up today. The 24-hour trading volume is 3.03 billion dollars, a 91.70% increase from the previous day. If you plan to invest, keep in mind the volatility and only purchase with the money you can afford to lose. Also, DYOR!
Where to Purchase ADA?
As one of the older coins in the blockchain arena, ADA can be traded in most of the established exchanges. This includes Binance, Coinbase Exchange, Bybit, OKX, Upbit, Bitget, and Kraken. Most of them have USDT and USDC pairs. If you prefer DEX (Decentralized Exchange), you can use Pancakeswap, Minswap, Wingriders, or VyFinance.
Finally, this article is not investment advice for you to purchase ADA. We projected our objective observation of the market, and it is up to you to decide whether to buy it or not. DYOR, and happy trading!