7% Rally Pushes Cardano (ADA) Closer To $1

Cardano (ADA) has not had the best start to the year 2022. The digital asset which had hit its all-time high above $3 in 2021 continues to suffer more downtrends in the market which has left it struggling below $1. Despite this, the digital asset is still doing quite well on a year-to-date basis, although not as good as the community would like. The recent uptrend in its price has pushed it closer to $1, but how soon can the cryptocurrency hit it?

ADA To $1?

A look at the charts does not spell good news for Cardano over the short and long term. This is because, despite the recent recovery that saw ADA put on 7%, it still continues to trade below the 50-day moving average. This indicator points to there not being any buying pressure over the short term for the digital asset, hence making this strictly a seller’s market.

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ADA’s slide below $1 was undoubtedly one of the worst things that could have happened for the cryptocurrency in the short term. This meant that the digital asset had effectively lost more than 60% of its value in a time when other large contenders are holding up above the loss point. It puts it in a territory where bears have completely taken over the reins and continue to drag the price down.

For this reason, while $1 may be close by, there is no strong evidence to suggest that it will hold. One thing though could be the growth of decentralized finance (DeFi) on the blockchain which has been ramping up in recent times. This demand could push enough momentum to see ADA hold above $1, but it is a long shot given the number of competitors in the space.

Cardano Still In The Running

Despite the price is down, it does not take away from the work that the developers of Cardano have been putting in. The network which is constantly being upgraded to make room for more demand recently completed another upgrade.

ADA price nears $1 | Source: ADAUSD on TradingView.com

Input Output HK, the developer behind Cardano, announced on Monday that it is has completed another upgrade that will help with scaling on the network. Its most recent upgrade will trigger an increase on a per-block basis, explained the developer, which will increase the Plutus script memory units limits from 56M to 62M, allowing the blockchain to be more scalable.

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As of the time of writing, ADA is still trading below $1 at $0.955, getting ready to test the $0.998 resistance point. A break above this would put the digital asset right above $1, where it must form significant support or risk losing its footing.

Featured image from ItsBlockchain, chart from TradingView.com