- ADA’s next big price movements will largely depend on success in smart contracts.
- Cardano’s recent market actions are likely to push institutions to reposition themselves for possible adoption.
ADA’s sideways trading continued today, falling by 0.9% in 24 hours to trade at $1.226 after reaching a 24-hour high of $1.243. Despite making several optimistic announcements, Cardano has been trading sideways for much of the past 10 days and has risen by a marginal 2.3% in the last seven days. However, ADA price is up by 577% year-to-date.
Decentralization and rising popularity
Cardano’s promising outlook has not gone unnoticed. With its recent market actions, it has attracted focus, and according to frontpagemetrics.com, it has gained more than 300,000 subscribers on Reddit in two days. While the figures may not necessarily translate to buyers, it is proof that Cardano has got investors’ attention.
One of the strongest drivers for ADA’s recent gains has been the much-anticipated move to full-scale decentralization of the ecosystem. The ecosystem is now fully decentralized, following the official transition on March 31st, 2021.
The move implies that the Cardano community will now be fully in charge of block production. This heralds a radical shift from the past when IOHK was involved in churning out blocks. The move has given users of the ecosystem more confidence in ADA’s scalability, sustainability, and privacy and will likely prop up prices further.
Institutional adoption and smart contracts to steer growth
ADA continues to attract institutional investment, and this will likely grow as its internal efficiency is improved and its investments pay off. This week, analytics provider Graph Blockchain bought Cardano tokens worth $300,000.
According to the company’s CEO, Paul Haber, this was only the second time the company had purchased a cryptocurrency token, signifying the positive outlook it holds for ADA over other altcoins. In addition, this was part of a strategic investment move by the company, which is targeted towards diversification into altcoins.
Cardano’s entry into the smart contracts segment is among the most anticipated moves by the company. This is mostly due to the proven efficiency of the Cardano network and its lower gas fees, which are expected to give it a competitive edge.
The launch of smart contracts is built on the Goguen era. The Goguen upgrade will also enable the network to venture into non-fungible tokens (NFTs), giving it the capacity to take a share of the popular segment. Importantly, the upgrade will enable smart contract writing by users with no technical knowledge, thereby attracting more people to the platform.
In another development, IOHK has partnered with Orion protocol in a move meant to strengthen Cardano’s position in the Decentralized Finance (DeFi) and NFT segments. As part of the agreement, Orion Protocol will serve as Cardano’s liquidity aggregator.
The announcement was made today, and it underlines Cardano’s keenness to take on Ethereum in the two spaces, which have experienced exponential growth this year. While Ethereum’s hold on NFT and DeFi remains strong, the partnership between Orion Protocol and Cardano is expected to optimize scalability and sustainability as their key strengths.
Cardano announced its entry into smart contracts during its monthly virtual conference. The company revealed that the move will be effective from May 2021 and will offer a credible alternative to Ethereum in the DeFi platform.
The Alonzo upgrade will serve as the test network for the rollout ahead of full-scale integration into the mainnet, scheduled for August 2021. With this announcement, the market is expected to respond by repositioning itself ahead of Cardano’s entrance into the DeFi segment. This will likely lead to increased acquisition of ADA and may stir up prices.
Technical outlook
ADA/USD will find the first support at $1.205 and the second support at $1.223.The RSI is at 57, and a charge by the bulls will push prices to the first resistance at $1.237. The second resistance level will be established at $1.242.
