- Whale activity on cryptocurrencies increases
- Cardano up 50% in March
- Growing Cardano institutional investment
Capital inflow into the cryptocurrency sector is on the rise after months of uncertainty characterized by strong sell-offs. Institutional investors are increasingly flocking the sector looking to take advantage of highly battered assets going by the massive upswing in the volume of whale transactions. Cardano is one of the coins attracting significant interest at the back of large wallet investor activity.
ADA technical analysis
In March alone, ADAUSD rallied by more than 50% powering through key resistance levels, affirming buying pressure buildup. After the recent leg higher, the coin is staring at short-term resistance near the $1.36 level. It is at this level that some 690,000 wallets bought 6.41 billion Cardano tokens.
A rally lowered by a daily close above the $1.36 level should pave the way for bulls to steer a rally to the $1.60 mark, the next substantial resistance level. Above the $1.60 level, ADAUSD would be on course for a bounce back to the $2 psychological level.
Failure to find support above the $1.36 level could leave ADAUSD under pressure, a move that could trigger renewed sell-off, resulting in Cardano pulling back to the $1 handle. However, technical indicators already signal, the coin is well poised to continue posting higher highs.
The Relative Strength Index has already turned bullish, rallying above the 50 level on the daily chart to 72, affirming bulls are in control. In addition, ADAUSD has already broken out of a long-running descending channel signaling an emerging uptrend.
Improving risk-on mood
Cardano has continued to recover losses amid a renewed risk-on mood in the sector in recent months. Investors are increasingly eyeing opportunities around speculative assets after months of losses that has seen many coins trade at great discounts.
A buildup in buying pressure in the stock market appears to have streamed into the cryptocurrency market. In recent weeks, the two markets have traded in tandem, with cryptocurrencies edging higher in response to major benchmark indices also powering high.
Cardano blockchain edge
In addition to the growing demand for speculative assets, Cardano’s price has also benefited from the massive growth of the altcoins ecosystem. The Cardano blockchain is experiencing a significant increase in the number of people using the network to process transactions.
The volume of transactions has also increased significantly, the network handling more transactions worth more than $100,000. On March 28 alone, more than 69 billion ADA tokens were transacted on the network, affirming increasing institutional demand.
Institutional investment buildup
New York-based exchange-traded fund Wisdom Tree has launched three new ETPs, one of which will track ADA price. The addition affirms strong institutional interest as a potential investment option. Wave Financial, on the other hand, has unveiled an ADA Yield Fund with a $100 million initial investment affirming increasing demand in the decentralized finance ecosystem.
Grayscale Investments, one of the largest crypto asset management funds, has launched a new Smart Contract Platform. In the fund, Cardano boasts of the highest asset allocation, all but signaling strong belief about t6he coins’ long-term prospects.
A spike in institutional demand is one factor that should continue to fuel strong demand for ADA coin, which should see its value increase significantly. The increase does not come as a surprise, given that the Cardano blockchain has proved to be highly effective in handling more than 25 transactions per second compared to just 14 for the Ethereum blockchain.
Cardano’s underlying fundamentals have improved significantly, going by the increased institutional interest and investment. In March, the coin started edging higher, going by the 50% plus rally. The prospects of the coin rallying to the $2 a coin level is high amid the renewed crypto interest.