Crypto Quill

Cardano, the eighth-largest cryptocurrency by market capitalization, has seen a remarkable increase in its trading volume in the last 24 hours. According to CoinGlass, a platform that tracks crypto market data, Cardano’s combined turnover for spot and derivatives markets reached almost $1 billion, representing a 54% surge from the previous day. This also accounts for 5.88% of Cardano’s total market cap of $18.1 billion.

What is Driving Cardano’s Trading Volume?

The spike in Cardano’s trading volume comes amid a downward trend in its price, which has been declining since mid-December. At the time of writing, Cardano is trading at $0.51, down by 3.33% in the last 24 hours and by 25.8% from its all-time high of $0.69 reached on December 16, 2023. Cardano has also lost its rank as the seventh-largest cryptocurrency to Polkadot, which has a market cap of $19.4 billion.

Some analysts have suggested that the surge in trading volume may not reflect a positive change in buying interest, but rather an increase in selling pressure. This could indicate that some investors are taking profits or exiting their positions in anticipation of further price drops. Alternatively, some traders may be taking advantage of the high volatility and liquidity to execute short-term strategies.

Cardano’s Long-Term Outlook Remains Bullish

Despite the current price slump, many experts and influencers have expressed their optimism about Cardano’s long-term potential. They have highlighted the various use cases and innovations that Cardano offers, such as:

• Providing financial services to the 1.7 billion unbanked people in the world, especially in Africa, where Cardano has partnered with the Africa Blockchain Center to launch a developer training course.
• Improving the transaction throughput and scalability of the network with the layer-two scaling solution Hydra, which can process up to 1,000 transactions per second per node.
• Launching smart contracts and decentralized applications on the network with the upcoming Goguen update, which will enable developers to create and deploy complex and interoperable solutions on Cardano.
• Supporting the development of social and governance projects on the network with the Voltaire update, which will introduce a voting and treasury system that will allow the community to decide on the future direction of Cardano.

Cardano’s founder, Charles Hoskinson, has also recently announced that the network will undergo a hard fork in February 2024, which will bring some new features and improvements to the protocol. He has also revealed that Cardano is working on several partnerships and collaborations with various entities, such as universities, governments, and corporations.

Cardano’s Price Analysis and Prediction

Cardano’s price has been following a descending resistance line since December 16, 2023, when it reached its all-time high. The price has tested this line several times, but failed to break above it. The most recent attempt was on February 7, 2024, when the price reached $0.56, but was rejected and fell back to the current level of $0.51.

The price is also trading below the 50-day and 200-day moving averages, which are acting as dynamic resistance levels. The moving average convergence divergence (MACD) indicator is showing a bearish crossover, while the relative strength index (RSI) is hovering around the 40 level, indicating a lack of momentum and direction.

If the price continues to decline, the next support level could be at $0.46, which coincides with the 78.6% Fibonacci retracement level of the previous uptrend from November 4, 2023 to December 16, 2023. A break below this level could open the door for further losses toward $0.38, which is the 100% Fibonacci retracement level and a historical support level.

On the other hand, if the price manages to reverse the trend and break above the descending resistance line, the first resistance level could be at $0.58, which is the 61.8% Fibonacci retracement level and a previous support level. A break above this level could trigger a bullish momentum toward $0.69, which is the all-time high and the 23.6% Fibonacci retracement level.