- Grayscale Investements announced addition of Cardano to its Digital Large Cap Fund.
- ADA prices climbed in response to the announcement, gaining 13.5% from July 2 low of $1.277 to July 6 high of $1.477.
NEW DELHI (CoinChapter.com) — Grayscale Investments, the world’s largest digital currency asset manager, has added Cardano (ADA) to its cryptocurrency fund. Moreover, ADA, Cardano’s native token, is now the 3rd most significant fund component in the fund. The solid fundamental setup has prompted traders to raise their bids on cryptocurrency.
The Grayscale factor
Grayscale added ADA to its Grayscale Digital Large Cap (GDLC) fund. As a result, the fund’s basket now holds 4.26%, Cardano behind Bitcoin (67.47%) and Ethereum (25.39%).
The asset manager mentioned that it sold a portion of its digital assets to reinvest in Cardano. The GDLC fund is a market-cap weighted fund. It means a digital investment with a larger market cap will have a more significant representation in the portfolio. As such, Bitcoin, with the largest market cap, holds the lion’s share. Also, Grayscale’s GDLC fund covers the upper 70% of the digital currency market.
A digital asset is eligible for inclusion in the GDLC fund if it satisfies its criteria, including market cap, liquidity, and coverage. Moreover, the fund updates its components every quarter. For example, during April’s component shuffle, Grayscale dropped XRP in favor of Chainlink.
Cardano is a smart contracts platform with ADA as its native token. Charles Hoskinson, a co-founder of Ethereum, created it. The platform aims to improve the scalability and efficiency of Ethereum. Additionally, ADA allows users to engage in transactions and staking. The Cardano token is the most capitalized cryptocurrency in terms of staked value. ADA’s 2,684 staking pools hold roughly 71.73% of its active supply, valued at $33.14 billion.
Cardano (ADA) Price Rally
Cryptocurrency prices are often reactive to news and updates. The same happened with ADA, as the token’s price continued its upwards rally that began on June 22.
Recently, ADA prices have struggled to move above the 50-Day (Red) and 100-Day (Orange) Moving Average trend lines on the daily chart. However, with the latest upward rally, the Cardano token is trading at the 100-Day MA level, indicating a bullish trend in the mid-term.
The 200-Day Moving Average (Green) line still supports a long-term bullish outlook for Cardano, as its token’s prices trade above the trend indicator.
The MACD, a trend-following momentum indicator, has some optimistic forecasts for the Cardano bulls. The MACD line (blue) is the difference between the 12-Day and 26-Day Exponential Moving Average. It indicates bullish momentum when it moves above the MACD signal (9-Day EMA of MACD) line. Moreover, the MACD histogram, which measures the difference between MACD and its signal line, moves upwards, providing more confidence to bulls.
Additionally, the Relative Strength Index, or RSI, for ADA, sits comfortably at a neutral 50.54. As such, it indicates the token is not yet overbought. The immediate support for the cryptocurrency lies at the $1.3 price level, with the following support level at $1.18. Also, $1.5 remains immediate resistance for ADA.
Various other technical indicators for the token predict a buying sentiment for ADA. Thus, it seems that Cardano’s bullish rally may continue shortly.