The Cardano price has jumped for the past two consecutive days as cryptocurrency prices bounce back. ADA is trading at $1.5570, which is 65% above the lowest level last week. This rally has brought its total market value to more than $48 billion, making it the fourth-biggest digital currency in the world after Bitcoin, Ethereum, and Binance Coin.
Positive news for Cardano
Cardano price is rising mostly because of the overall performance of cryptocurrencies. As I wrote in my Ethereum price prediction, the most important reason why cryptocurrencies have rallied is that there is a close correlation between most digital currencies.
The second reason why Cardano and other currencies have jumped is because fears of inflation in the United States have eased. This is evidenced by the fact that the US dollar has dropped against most currencies, stocks have rallied, and bond yields have declined.
Third, ADA price has jumped because of the fact that many institutional investors have started to invest in the currency. According to Coinshares, Cardano reported inflows of more than $97 million last week amid the sell-off. Of course, this is a small amount but it means that there are some investors who believe in it. The report said:
“Cardano saw the largest inflows of US$10m, which may represent investors actively choosing proof of stake coins based on environmental considerations”
Meanwhile, the number of people investing in Cardano has also increased. In a report today, Cardano Foundation said that the number of ADA wallets surged to more than 1 million. The network is seeing more than 7,000 new accounts created every day. So, is Cardano a good investment?
Cardano price forecast
The daily chart above shows that the Cardano price has been in an overall bullish trend in the past few months. The rally found a substantial resistance last week as the price crashed by more than 60%. It has bounced back by more than 65% and is above the ascending trendline that is shown in orange. ADA is also receiving support by the 50-day and 100-day exponential moving average. Also, it is finding some resistance that is shown in blue.
Therefore, in my view, the overall outlook for Cardano at this point is cautiously bullish. It depends on whether the price is able to move above the blue trendline. If this happens, we can’t rule out a situation where the price jumps to $2. However, a drop below the lower support line will invalidate the bullish thesis.