Cardano price has made a spectacular correction over the past two weeks as investors await the upcoming Ethereum merger. It has risen from an August low of $0.4248 to a high of $0.5244, taking its market cap to over $17 billion.
Why is ADA recovering?
cardano is an ethereum-killer that aims to be the leading platform for building apps in decentralized finance (DFI), non-fungible tokens (NFTs), and the metaverse. Developers began building on its platform in 2021 after the Alonzo hard fork.
Over the past few months, the number of developers building on Cardano has increased. According to its website, there are now over 1,000 developers building the app across all regions. However, it appears that the network has not had enough success.
For example, its DeFi ecosystem now has a total value at lock (TVL) of around $192 million, making it smaller than other new blockchains such as Cronos and Avalanche. Minswap, which has a TVL of $48.8 million, has a market dominance of 53%.
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The next major catalyst for the price of Cardano will be the upcoming Vasil hard fork which will take place in September. This will be a significant fork that will make the platform significantly faster and more friendly to developers. There is a possibility that the price of ADA will continue to move towards this hard fork.
Meanwhile, like all cryptocurrencies, the price of ADA will also react to the upcoming Ethereum Merge, The merge is a transition that will see the network move from Proof-of-Work (PoW) to Proof-of-Stake (PoS). Historically, the price of cryptocurrencies has moved in sync.
Another major catalyst influencing the price of Cardano will be the action of the Federal Reserve. With inflation declining, it is likely that the Fed will begin to slow its aggressive rate hikes in the coming months.
cardano price prediction
The four-hour chart shows that Cardano price has been in a strong bullish trend over the past few weeks. It moved above the crucial resistance level at $0.4823, which was the highest point on August 26. This was also the upper part of the ascending triangle pattern.
Meanwhile, ADA price also moved above the 25-day and 50-day moving averages, while MACD moved above the neutral point. It has also invalidated the double-top pattern, which is usually a bearish signal.
Therefore, Cardano is likely to rise in the near term as buyers target a key resistance at $0.5947, which is about 17% higher than the current level. Hence, there is a possibility that Cardano will continue to move beyond the merge and Vasil hard forks.