Cardano (ADA) has risen above the $1.55 level in early trading on Wednesday after losing nearly 2% of its value since the previous session, although, since then, volatility seems to be on the weaker side. At the time of writing, ADA/USD is trading around $1.56.
Although the long-term prospects for Cardano indicate a strong uptrend, it could face some momentary weakness amid the current uncertain mood among the crypto community. There could also be pressure building up from sellers amid profit-taking after its recent gains and ahead of the price trying to break past another key level which sits at $1.60.
Fundamentals offer strong support to a sustained bullish momentum in Cardano in the near-term. Last week, the company behind the blockchain – IOHK, announced the successful run of Plutus smart contract on the AlonzoBlue testnet, giving markets much to cheer about as the Ethereum-killer gets ready to take on the leader in the DeFi space.
During the previous session, IOHK took to social media to share another update about Alonzo Blue 2.0’s testnet for the Cardano network. This is part of several upgrades the network will undergo in order to support full smart contract capabilities, which could then give it an edge over Ethereum as it attracts DeFi projects on to its blockchain.
Key Levels to Watch
Most of the smaller moving averages in addition to the MACD indicator on the H4 chart of ADA/USD are suggesting a bullish bias, which could mean more upside for ADA in the near-term. For now, Cardano’s price is holding close to the pivot level and higher buying interest can take it all the way up to $1.75 before it encounters some resistance.
A break past this level can see buyers test the key $2 level, but not before they encounter resistance again at around $1.94. On the other hand, if the mood in the market sours, things can turn around pretty quickly and the price can tumble below the pivot point towards the support which sits at $1.36.