Cardano (ADA) has had a strong start to the week, rising 2% over the last 24 hours to trade at $0.3725 on July 8. With this price increase, ADA has recovered all of the losses it suffered on Sunday, July 7, indicating a change in investor sentiment towards the Layer 1 token.
ADA’s rise comes against the bearish cloud that continues to engulf the broader cryptocurrency market. For example, the top two cryptocurrencies by market cap, Bitcoin (BTC) and Ether (ETH), are down about 1.89% and 0.79%, respectively.
Let’s take a look at the bullish factors that drove ADA’s price increase today.
Cardano Founder Reveals Chang Hard Fork Is ‘Basically Existent’
ADA’s gains today come after Cardano founder Charles Hoskinson gave an update on Cardano’s progress and the upcoming Chang hard fork. Speaking during an Ask Me Anything (AMA) session on July 7, Hoskinson outlined ongoing efforts and milestones, adding that the Cardano Chang hard fork is almost ready.
Reflecting on the challenges and achievements the Cardano ecosystem has faced over the past few years, he acknowledged that it has been “a very long few years,” and noted that despite “getting involved in a few things,” the ecosystem has overcome these obstacles, particularly on the governance side.
Hoskinson highlighted the completion of all elements of CIP 1694 as a significant achievement, saying it took around two years to complete but was essential to the Cardano architecture.
The heart of Hoskinson’s update was the announcement that Node 9.0, which is essential for the Chang hard fork, is nearly complete.
“What’s interesting about Node 9.0 is that the Windows hard fork is basically there.”
The Chang hard fork represents a significant upgrade to the Cardano ecosystem. According to Hoskinson, it is expected to initiate the transition to the Voltaire era, which represents the final step in the roadmap to creating a fully decentralized blockchain ecosystem, which “has been two years in the making.”
Past performance suggests that the ADA price could see a significant increase ahead of the upgrade. According to IntoTheBlock, ADA saw a significant surge ahead of the last major upgrade of 2021, rising 130% from $1.35 to $3.10 in just one month.
This historic achievement has raised expectations that the upcoming Chang hard fork could catalyze a significant price rally for ADA, which explains today’s price action.
Cardano Network Growth
ADA’s upside potential is consistent with the growth the Cardano network has experienced over the past month. According to data from IntoTheBlock, the number of active addresses on the Cardano blockchain has increased from 21,560 on June 17 to 36,700 currently. Likewise, new addresses have increased from 6,110 wallets to 10,420 during the same period.
Additional data provided by IntoTheBlock shows that the number of addresses holding 10-100 million ADA has increased from 356 in early February to around 400 at the time of publication.
This suggests that holders of 10-100 million ADA will increase their purchases in 2024, indicating confidence in the long-term potential of the token price.
This is even more evident in the net capital inflows of crypto asset funds last week. According to the CoinShares weekly report, the Cardano fund received $100 million in the week ending July 5, bringing its inflows for the year to $9 million.
ADA’s bullish divergence
Today’s ADA rally is preceded by a period of growing bullish divergence between price and the Relative Strength Index (RSI).
In particular, the price of ADA fell between June 17 and July 7, forming lower lows. However, during the same period, the daily RSI rose, forming higher lows.
According to the rules of technical analysis, the difference between the price decline and the RSI rise indicates that the prevailing uptrend is strong, which encourages traders to buy more in the local decline.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.