Cardano (ADA) Back Near $1 as Market Sentiment Deteriorates
It’s back to bearish for Cardano (ADA) and several other cryptocurrencies after leader Bitcoin fell back to the $36,000 level amid a risk-off mood in global financial markets. At the time of writing, ADA/USD is trading at around $1.03.
The decline in ADA’s price comes on account of the market sentiment taking a beating, despite the blockchain’s developers revealing promising updates to tackle network congestion issues. On Tuesday, Input Output – the firm behind the development of Cardano, announced a proposal to increase block size by 11% to make the network more scalable.
A larger block size can allow more transactions to be recorded in each block, potentially countering network congestion issues on the blockchain. In addition, the developers confirmed that they are working to improve the performance of Plutus, the Cardano blockchain’s execution platform for deploying smart contracts.
Plutus script memory units will rise from 12.5 million to 14 million, which will give the smart contracts the power to process a greater quantity of data. Both developments will go live on Friday, offering a way to improve network capacity and give dApp users on the network a better experience overall.
Cardano’s ADA can also enjoy some support from data that reveals a steady increase in social activity. The number of subscribers on Reddit has been ticking higher steadily through January, ever since the blockchain announced that dApps were ready to go live.
ADA/USD Technical Analysis
On the 4-hour chart of ADA/USD, moving averages as well as leading technical indicators MACD and momentum suggest a strong bearish bias. Buyers seem unlikely to step in until the market sentiment improves.
Cardano is trading just under the pivot point at $1.04 but well above the immediate support at $0.93. Keep a close watch on the key $1 level as a break below it can see ADA test support in the near term.
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