Cardano prices have hit their all-time high. The cryptocurrency has reached its record high even though most other major cryptocurrencies are trading at a significant discount to their 2021 lows. ADA became the third-largest cryptocurrency by market cap after its recent outperformance. Why is ADA going up and what’s the price prediction for 2021?
There has been a lot of volatility in cryptocurrencies in 2021. While the cryptocurrency market hit its all-time highs in the year, the market has fallen since then. There have been several developments related to cryptocurrency markets in 2021. While there has been a crackdown in China and the country tightened the regulations on cryptocurrency trading and mining, cryptocurrency adoption has also been increasing.
Cryptocurrency adoption is rising.
Robinhood’s second-quarter earnings revealed the growing popularity of cryptocurrency trading among retail traders. Almost two-thirds of Robinhood customers with funded accounts traded in cryptocurrencies in the quarter. Meme cryptocurrency Dogecoin accounting for the bulk. The revenues from cryptocurrency trading accounted for a large chunk of Robinhood’s revenues.
Meanwhile, cryptocurrency adoption has been rising. More organizations are starting to accept payment in digital currencies. Even AMC Entertainment has announced that it will start accepting Bitcoins.
Why is Cardano going up?
Cardano seems to be going up amid optimism about its “Alonzo” upgrade. The upgrade would help address the issues with the current network and increase ADA’s functionality. Alonzo would be a smart contract and it's expected to launch on Sept. 12. Ethereum, which was co-founded by ADA founder Charles Hoskinson, has the first-mover advantage in smart contracts.
Cardano has positioned itself as an efficient and secure alternative to decentralized platforms like Ethereum. Investors seem to be buying into the argument and ADA is now only behind market leader Bitcoin and runner-up Ethereum in terms of market cap.
Cardano price prediction
ADA prices are looking bullish technically after hitting their all-time high. Cardano now trades above all of the moving averages, which signals a technical uptrend. The MACD (moving average convergence divergence) also gives a buy signal. However, the 14-day RSI (relative strength index) has risen to 79, which indicates overbought positions. RSI values above 70 signal overbought positions.
Cardano has been forming higher highs and lower lows since mid-July when prices hit their near-term bottom. There has been a bullish formation in ADA, which could take the prices even higher in the near term. There's also a bullish cup and handle formation in Cardano, which is another bullish technical indicator.
To sum it up, the stars look well aligned for Cardano from a technical as well as a fundamental perspective. Apart from the strong technicals, the Alonzo upgrade could be another bullish driver for ADA prices.
On the downside, $2.31 could be the first support for Cardano followed by the 10-day SMA, which is currently at $2.11. If ADA can hold on to these price levels, it could continue the uptrend. For now, the prices might consolidate at the current levels before making their next up move.
Be prepared for volatility in Cardano prices since the boom-bust cycle isn't uncommon for cryptocurrencies. Also, the news flow over the regulatory environment and the Alonzo upgrade could impact ADA prices.