The Cardano price is experiencing a strong year-to-date (YTD) increase of around 62%. Nevertheless, ADA is facing a crucial make-or-break moment in the 1-day chart, which could decide the long-term trend.
At press time, the ADA price was at $0.40, registering a slight 1.1% decline over the past 24 hours, with a 5.4% gain for the week. This puts the price just below the critical resistance zone between $0.405 and $0.42 after ADA broke out of a downtrend in mid-January that has lasted since June 2022 (blue line in the chart).
The zone between $0.405 and $0.42 served as extremely strong support for the price from May to early October 2022, before the downside break happened on October 10. Since then, support has turned into key resistance. To make matters more complicated, the 200-day EMA is now approaching the top of the resistance zone at $0.42.
The 200-day moving average is an indicator that determines the long-term trend of an asset. When the price breaks above the 200-day moving average indicator, it usually signifies a trend reversal and a return to bullish territory.
The fact that the 200-day EMA and resistance zone are now coinciding presents the Cardano (ADA) price with a make-or-break moment.
If the price can breach this level, ADA bulls could gain the upper hand. If the bulls fail, there could be a retest of support at $0.373 and subsequently the 100-day EMA at $0.348.
ADA price faces crucial moment | Source:
New Cardano Stablecoin To Drive Price Above Resistance?
In addition to a boost from macroeconomic events and the broader financial markets, ADA investors can also hope for a Cardano network-intrinsic reason for a rally such as the overcollateralized stablecoin Djed launched on the mainnet on Tuesday.
A whopping 1.85 million DJED were minted since the launch. However, growth has remained modest for now. While Djed’s TVL was $10.35 million according to DefiLlama’s data, it has since increased only slightly to $11.67 million.
Djed stablecoin TVL | Source:
The basic principle of the stablecoin is to use the volatile value of ADA to create a stablecoin whose value is pegged to the USD. This makes ADA a kind of reserve currency.
Since Djed is an overcollateralized stablecoin with a reserve ratio of 400%-800%, it theoretically has the potential to create a considerable shortage in the supply of ADA and thus influence the price. The stablecoin currently has a reserve ratio of 633%, which means that each DJED is backed by more than six times its value in ADA.
However, with currently 29.4 million ADA, Djed does not yet draw the large volume to have an impact on the price. In total, Cardano has a circulation supply of 34.6 billion ADA. Thus, it remains to be seen whether Djed can continue to grow and thus contribute to a supply shortage for ADA.
Featured image from Kanchanara, Chart from TradingView.com
Jake Simmons, a dedicated crypto journalist, has been passionate about Bitcoin since 2016 when he first learned about it. Through his extensive work with uniquehot.com and Bitcoinist.com, Jake has become a trusted voice in the crypto community, guiding newcomers and seasoned enthusiasts alike towards a deeper understanding of this dynamic field.
Read more
His mission is simple yet profound: to demystify Bitcoin and cryptocurrencies and make them accessible to everyone.
With a professional career in the Bitcoin and crypto scene that began right after graduating with a degree in Information Systems in 2017, Jake has immersed himself in the industry. Jake joined the NewsBTC Group in late 2022. His educational background provides him with the technical prowess and analytical skills necessary to dissect complex topics and present them in an understandable format. Whether you are a casual reader curious about Bitcoin or an investor seeking to navigate the latest market trends, Jake’s insights offer valuable perspectives that bridge the gap between complex technology and everyday usage.
Jake is not just a reporter on technological trends; he is a firm believer in the transformative potential of Bitcoin over traditional fiat currencies. To him, the current financial system is on the brink of chaos, propelled by unchecked government actions and flawed Keynesian economic policies. Drawing from the principles of the Austrian school of economics, Jake views Bitcoin not merely as a digital asset but as a crucial step towards rectifying a failing monetary system. His libertarian views reinforce his stance that just as the church was separated from the state, so too should money be freed from governmental control.
For Jake, Bitcoin represents more than just an investment; it's a peaceful revolution. He envisions a future where Bitcoin fosters a sustainable and responsible financial framework for generations to come. His advocacy is not about opposition but about evolution, about laying the groundwork for a system that prioritizes transparency and equity over secrecy and inequality.
As a journalist, Jake’s articles are crafted with the precision of a scholar and the passion of a true believer. He provides not only news but also thoughtful analysis that connects the dots between daily developments and larger economic theories. His work is a beacon for those lost in the technical jargon often associated with crypto discussions, illuminating the practical implications and benefits of these technologies.
In summary, Jake Simmons is not just reporting on a revolution; he wants to be part of it, fully committed to enhancing public understanding and adoption of Bitcoin and cryptocurrencies. His work is more than just a collection of articles; it’s a resource, a guide, and a companion for anyone ready to explore the potential of this digital frontier. Whether you are taking your first steps into crypto or are a veteran looking to stay on top of the latest trends, Jake’s insights provide clarity and foresight in an often unpredictable industry. Join him on this journey to reshape the world of finance, one post at a time.
You can engage with his latest takes on Twitter: @realJakeSimmons.
Close
Disclaimer: The information found on NewsBTC is for educational purposes
only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any
investments and naturally investing carries risks. You are advised to conduct your own
research before making any investment decisions. Use information provided on this website
entirely at your own risk.
