Cardano Talking Points:
- Cardano put in a massive breakout today with prices testing the two-month-high.
- The introduction of smart contracts after the Alonzo hard fork may put Cardano on a more competitive basis with Ethereum.
Crpytocurrencies have been well bid over the past three weeks, evidenced by the +50% run in Bitcoin and the +80% move in Ethereum. But the cryptocurrency making the most waves today is neither of the big ones, nor is it anything related to dogs or Shiba Inus.
Cardano is the cryptocurrency on the move today, and there were a couple of different news items helping to drive the flow. The founder of Cardano, Charles Hoskinson, who is also a co-founder of Ethereum announced that he’d announce an exact date of the upcoming Alonzo hard fork this Friday. This will enable Cardano to house smart contracts on its network, similar to Ethereum, and this move will make the cryptocurrency more competitive from that vantage point. And considering that Cardano is a proof-of-stake currency, the introduction of smart contracts can massively increase its possible utility considering that one of the primary qualms against cryptocurrencies is the energy expenditure entailed.
The green advantage for Cardano might be short lived, however, as Ethereum co-founder Vitalik Buterin announced last week that Ethereum is ready for its next upgrade, transitioning to a proof-of-stake concept along the way that will reduce energy use by up to 99%.
On the chart, today’s rally in Cardano helps to cap an astounding three-week-run in which price has gained as much as 85% from the July 20 low. Resistance at this point is showing just inside of the 1.8900 level, and this presents a possible point of reference to use for breakout scenarios. The support base from early-July, while consistent, is so far away from current price that it brings little value to near-term analysis. More interesting, however, for potential support is the price just inside of the 1.5000 level, taken from prior resistance.
Cardano (ADA/USD) Daily Price Chart
Chart prepared by James Stanley; Cardano on Tradingview
— Written by James Stanley, Senior Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX