The Cardano (ADA) network is among the most promising cryptocurrency projects with accelerated network development that aims to surpass established entities such as Ethereum (ETH). This network activity is expected to positively impact ADA’s value.
Since the start of the year, ADA has shown a bullish trend, reaching a yearly high of around $0.39, despite bearish attempts to lower the price. However, ADA faces resistance at the $0.40 level, which is challenging for bulls to overcome. If this level is surpassed, ADA is likely to continue gaining and possibly toward $1. By press time, ADA was trading at $0.39 with daily gains of over 1%.
Despite the bullish sentiments, ADA investors are cautious of the current $0.40 resistance, which is a crucial barrier toward hitting $1. It is worth noting that Cardano is backed by several fundamentals likely to push the ADA to reclaim $1.
Impact of Djed stablecoin on ADA’s price
One of the key factors that could drive the value of ADA is the expected launch of Djed stablecoin in the last week of January. Notably, the stablecoin is projected to significantly improve the prospects of Cardano by boosting the network’s Total Value Locked (TVL) metric, which is a key indicator of blockchain activity, particularly in the decentralized finance (DeFi) space.
Although Cardano ranks eighth among cryptocurrencies based on market capitalization, its TVL among DeFi projects is only 27th. This discrepancy has resulted in uncertainty among investors. However, a surge in TVL could make ADA more attractive to investors.
In this case, the value of ADA is likely to emulate other assets, such as Tron (TRX), whose price surged after launching a stablecoin.
It is important to note that there is still uncertainty surrounding the launch of Djed stablecoin, as the market has faced significant losses related to stablecoin collapses, such as the Terra (LUNA) ecosystem crash. Additionally, Djed is not backed by fiat currency but by Cardano, which could impact its stability. However, despite these concerns, the launch of a stablecoin is still expected to have a positive impact on ADA.
Cardano’s sustained development
The Cardano network is also undergoing several other significant developments potentially to drive the value of ADA toward $1. For instance, the team is working on unveiling the first-ever smart contract written in Eopsin, an innovative Pythonic programming language, and an upgrade to introduce new built-in functions to the Plutus smart contracts. Notably, since enabling the smart contract feature on the network, the metric has surpassed the 4,000 mark.
On February 14, the network is also set to release an update that will enable Plutus to support Schnorr and ECDSA (Elliptic Curve Digital Signature Algorithm) signatures. These digital signatures have been touted as smaller, faster to process, and more difficult to forge, and will eventually help developers gain access to more signature designs.
The increasing development initiatives and positive technical analysis are already resulting in more users leveraging the Cardano network. As reported by Finbold, Cardano had added 51,868 wallets in the first month of the year.
ADA technical analysis
In the meantime, the one-day technical analysis of ADA is mainly bullish, with the summary aligning with the ‘buy’ sentiment at 12 and moving averages signaling a ‘strong buy’ gauging at 11.
In general, the prospects of ADA hitting $1 are strong, and the stablecoin launch on the network, along with other development initiatives, can push the asset toward this elusive goal. However, the success of ADA will also depend on the general market trajectory and the ability of the network to exhibit stability, especially after recent minor downtime.
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