3 Reasons Cardano (ADA) Suddenly Surged by 85% in 10 Days
July 08, 2020 @ 16:05 +03:00
The price of Cardano (ADA) increased from $0.074 to $0.137, by more than 85% in less than two weeks. It surpassed Bitcoin SV (BSV) to become the sixth-largest cryptocurrency by market capitalization. Three factors likely caused the intense rally of ADA in recent weeks. The potential catalysts are the new Shelley upgrade, favorable market structure and the rapid growth of the decentralized finance (DeFi) market.
On July 1, a node equipped with Shelley upgrade components was deployed onto the mainnet. By the month’s end, on July 29, the changes will be implemented on Cardano’s network through a hard fork. The new Shelley upgrade has had a significant impact on the ADA price because of its staking system. Cardano is a proof-of-stake network, which means there are no miners. Users, who run nodes, maintain the network by staking ADA. In return, users benefit from the reward system of Cardano.
The roadmap also states that by the end of the Shelley upgrade, Cardano is expected to become more decentralized with upwards of 1,000 stake pools. The growing demand for ADA likely stems from investors who find the reward system under Cardano’s new upgrade compelling.
Since August 2018, the $0.107 level has acted as a strong multi-year resistance level for ADA. Every attempt to recover beyond it in September 2018 and June 2019 was met with a fierce sell-off. The last time ADA came close to testing the $0.107 level was during the first week of March, right before Bitcoin dropped to sub-$4,000. Within three weeks, the price of ADA fell by 71% from the local peak.
The DeFi market on Ethereum is exploding, surpassing $2 billion in total value locked across all DeFi protocols. In a recent tweet, Cardano founder Charles Hoskinson hinted that Cardano could soon become a key player in the DeFi space. If Cardano evolves into the backbone of the DeFi space, it might present a new growth opportunity for the blockchain network in the medium-term.
3 Reasons Cardano (ADA) Suddenly Surged by 85% in 10 Days, CoinTelegraph, Jul 8