Why Cardano (ADA) Broke All-Time Highs
Cardano (ADA) continues to shock crypto investors, as its price entered uncharted waters and broke a series of all-time highs within a day. ADA is now fully in price discovery mode, having risen from lows of $0.03 to above $2.35.
The most recent rally drove ADA more than 18% up in the past 24 hours, extending the rally to $2.53 during European trading hours. ADA broke its own records above $2 achieved in May 2021.
For ADA, the current rally is not even happening at peak volumes, suggesting the possibility for additional growth in the coming days as trading intensifies.
Altcoins Promise Higher Returns
One of the reasons ADA was lifted out of the pack was demand for altcoins with higher returns. ADA is not the only asset booming, but it was attractive as it started from a low price range.
Other assets affected by the hype include Polkadot (DOT), Solana (SOL), Terra (LUNA). The speculative interest is also flowing into XRP, which is yet to break out to previous highs.
As the BTC market cap dominance continues to slide, smaller and more volatile assets are having a field day. ADA gets an additional boost from social media mentions, entering a hype cycle based on social media mentions.
Attention has thus shifted from BTC and ETH, chasing the recent ADA price spike.
ADA Gets Boost from Binance Trading
The latest ADA price spike was immediately reflected by increased buying demand. The Binance exchange trading pair sees significant buying interest on the order books even at prices above $2.50.
The buying interest suggests ADA is attractive for its potential to climb to a higher price range. Despite its 32B supply, ADA is also partially locked up for staking, thus diminishing the assets available for trading.
The Cardano Network Adopts Tokenization
The Cardano network has existed for a long time with little real development. The promise to build smart contracts and compete with Ethereum has been deferred for years.
Now, Cardano announced it managed to create its own version of NFT tokens, sparking hopes the project will finally achieve real use cases and growth. The Cardano network may soon become attractive for issuing collectible airdrops, hitching a ride on a recent trend of minting rare series of images.
The popularity of NFTs may also be boosting awareness of the Cardano network, especially after minting new collectibles on Ethereum turned out to incur significant gas fees.
Can ADA Drive the Altcoin Season
The rise in ADA may expand to other assets, also promising for increased demand. ADA has gained criticism over the years for its relatively low utility and lack of progress on smart contracts.
But the exuberant demand for ADA may re-spark growth in other trading pairs. DOT, which continues to rise in the past weeks, is also one of the tokens potentially benefiting from demand for fast price action.
ADA is currently highly dependent on its Coinbase trading pair, as well as the Binance International exchange ADA/USDT pair. The two markets make up about 28% of all ADA activity. The asset, which first appeared in 2017, went through many stages and was, for a long time, considered an inactive dead coin.
In 2021, however, the Cardano network increased its transaction count, carrying more than 60,000 transfers per day, up from only 15,000 transactions. The ADA asset is, in theory, capable of fast and cheap transactions, although during less active times the Cardano network saw almost zero coin transfers.
DeFi Wallet Coming for ADA in September
The Cardano network initially relied on the Daedalus wallet, which saw problems with fake apps deployed to Google App Store.
Currently, ADA can be held in multi-asset wallets such as Exodus. A new proposal from CardWallet offers another solution for fast mobile transfers for ADA.
The CardWallet will be the tool to open the client-side potential of Cardano for various DeFi operations.
The wallet is expected to arrive in mid-September, and will be capable of performing transactions not only on the Cardano blockchain, but also access the Bitcoin, Ethereum and Binance Smart Chain.
This will open the door for DeFi protocols built on Cardano, while also making use of the liquidity and reputation of already existing DeFi hubs such as Compound, Aave, as well as decentralized exchanges Uniswap and SushiSwap.
How High can ADA Go
The current ADA rally envisions at least a doubling of prices. In the past, ADA has been volatile and has erased a significant chunk of its value.
The latest rally re-sparked hopes of price appreciation, with $3 envisioned in the short term. However, prices above $6 are not out of the question.
In the coming months, prices above $7 are seen as a viable possibility for ADA, coming with wider adoption and DeFi bridges.
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