Cardano price is in a steep recovery after falling to $1.500 yesterday. ADA is trading at $1.8857, which is 26% above its lowest level yesterday. It has a market capitalization of more than $59 billion, according to data compiled by CoinMarketCap.
Why ADA price surged
There are three main reasons why Cardano defied gravity during the cryptocurrency meltdown. First, the gains were mostly because of higher volume as social media users promoted the currency. Indeed, Cardano was trending in the United States and other countries yesterday. This pushed more people, especially retail traders to buy the currency.
Second, some analysts promoted ADA as a viable alternative to Bitcoin, which Tesla stopped accepting, In a Tweet, Charles Hoskinson, the founder of Cardano said that ADA was a good alternative because of its energy-efficient production mechanism. Unlike Bitcoin, ADA is mined using a proof-of-stake mechanism.
Third, ADA price surged after the developers released an update on the ongoing peer-to-peer deployments. This process has been going on since last year when the development moved to Shelley. The process accelerated since March this year. The semi-public P2P testnet will be launched soon. They wrote:
“We will be soon launching the semi-public P2P testnet, with the support of a small group of SPO partners to help with initial testing, before broadening this out to the wider SPO community.”
Other reasons why the ADA price has continued being resilient are the upcoming deployment of its solution in Ethiopia and the general view that this dollar strength may be short-lived. Most importantly, the developers are moving fast to support smart contracts, which will make Cardano a major player in app development. They have inked partnerships with Eleks, Node Factory, and MLabs.
Cardano price prediction
In my last ADA price prediction, I pointed to the bullish flag pattern that was forming on the hourly chart. In technical analysis, this pattern is usually a bullish signal. ADA managed to move above the upper resistance level yesterday when it soared to almost $2. Today, the price is hovering above the upper line of the bullish flag. It is also being supported by the 50-day and 25-day moving averages.
With volume holding steady, there is a possibility that the price will soar to $2 in the near term. Indeed, it is often common for asset prices to hold below a key resistance before breaking out eventually. A move above $2 will open the possibility of the price rising to $2.5, which is the next main target.