Cardano sees increased transactions as ADA breaks out of downtrend

Cardano's transaction volume flipped Ethereum and Litecoin in its jump. Image from freepik
Cardano’s transaction volume flipped Ethereum and Litecoin in its jump. Image from freepik

Key Takeaways:

  • Cardano’s 24-hour transaction volume surged to $17.04 billion, behind only Bitcoin’s daily transaction volume.
  • However, ADA prices continue to trend downwards.

NEW DELHI (CoinChapter.com) — Blockchain platform Cardano’s native token ADA failed to pull up from its downward spiral. As a result, ADA prices trended downwards for nearly the 7th consecutive day on Feb 22 before a buying spree near the end of the day saw Cardano prices move upwards.

Cardano slipped nearly 27% from Feb 16’s high of $1.11 to reach an intraday low of $0.813 on Feb 22 before recovering.

Cardano, Cardano sees increased transactions as ADA breaks out of downtrend
ADAUSD price action over the last seven days. Source: CoinMarketCap.com

ADA’s recent downtrend has brought prices to levels last seen nearly a year back. The Cardano token challenged its 26-day exponential MA (white wave) on Feb 16, but the resulting rejection sent ADA tumbling.

At present, Cardano has support from the more than 5-month long descending channel in which its prices are moving. Since Sept, the descending channel support has survived multiple tests, and bulls would likely try to hold prices inside the channel.

If ADA breaks below immediate support at $0.816, Cardano would likely fall to $0.784. Moreover, further selling pressure could push ADA prices to $0.74 before the token recover. The Cardano token fell 8.05% on Monday, likely responding to the growing Russia-Ukraine tensions.

Cardano, Cardano sees increased transactions as ADA breaks out of downtrend
ADAUSD on the daily charts with MACD. Source: Tradingview.com

Meanwhile, trend-based momentum oscillator MACD continues to be bearish for ADA. The indicator charted a bearish crossover on Feb 17, in which the MACD line (difference between 12-day and 26-day EMA) moves below the MACD signal line (9-day EMA of MACD).

Also Read: Cardano increases block size as ADA continues to hold above $1 support.

Since then, bars on the MACD histogram are expanding, indicating that the bears’ grip on the price momentum is strengthening.

Cardano’s Oversold RSI Might Help Trigger A Recovery

The relative strength index for ADA rebounded from oversold levels today, after clocking 28.96 on the daily charts. In theory, an oversold RSI often forecasts a bearish to a bullish trend reversal. However, as ADA’s uptrend began, its RSI moved into neutral regions with a value of 32.85.

Cardano, Cardano sees increased transactions as ADA breaks out of downtrend
ADAUSD on the daily charts with RSI. Source: Tradingview.com

If the uptrend sustains, ADA might move above immediate resistance at $0.915 to challenge the $0.964 price level. A market-wide buying spree would likely see ADA target resistance near the $1.02 price level before prices pare.

Demand For Cardano Pushes Transaction Volumes Higher

Cardano (ADA) has become one of the most active networks, now trailing only Bitcoin (BTC) in 24-hour transaction volume.

According to data from blockchain research firm Messari, Cardano’s current 24-H transaction volume is $17.04 billion, miles ahead of Ethereum (ETH) with $5.25 billion and Litecoin (LTC) with $7.24 billion. Furthermore, Cardano is closing in on Bitcoin, behind by only $1.81 billion.

List of most active blockchains in order of 24-H transaction volume. Source: Messari
List of most active blockchains in order of 24-H transaction volume. Source: Messari

Cardano’s transaction volume crossed $30 billion twice in Feb, reaching $35.1 billion on Feb 14 and $31.1 billion on Feb 19. However, the recent highs are still nearly 75% less than the platform’s ATH transaction volume of $138 billion on Sept 3.

The increased transaction volume, coupled with the long wicks on both red and green daily candles, indicates the Cardano token’s high demand. The bulls seem to be aggressively buying the dips. Moreover, as Monday’s long wick shows, bears are selling the rallies.

Another likely reason behind the recent spike in transaction volume on Cardano could be the launch of SundaeSwap DEX. Despite staggering during its launch, the platform crossed $100 million in TVL on Feb 13, as per data from DefiLlama.

Also Read: Daedalus 4.8.0 launched on Cardano, while ADA stagnates.

Moreover, declining network activity on both Bitcoin and Ethereum also helped Cardano move up the ranks. Cardano boasts of being an ‘Ethereum killer,’ a blockchain platform that eventually hopes to overtake and replace Ethereum.

However, while Cardano is ahead of Ethereum in transaction volume, there are many other attributes where the prime altcoin is a clear winner. For example, Ethereum has a bigger market cap with active addresses.

At the time of writing, ADA was trading at $0.89, up 3.42% on the day.

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Cardano, Cardano sees increased transactions as ADA breaks out of downtrend

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