Cardano is a Proof-of-Stake (PoS) blockchain, which released the Alonzo upgrade in September last year. This is a key part of the Goguen era, that offers services for digital applications (Dapps), smart contracts and decentralized finance (DeFi), with more than $300 million in TVL already. It also has decentralized exchanges (DEX) for currency transactions, etc. However, when it should have turned bullish, Cardano turned bearish instead, and it has been declining since, falling to $0.75, and missing out on the rally of the crypto market in October and early November.

Cardano had been one of the most bearish coins among the major cryptocurrencies during this period; then they launched the Alonzo upgrade. Buyers attempted to reverse the price higher a few times, but failed, and the decline continued until the middle of this month, with Cardano printing lower lows, even though the crypto market had formed support since the middle of January.

Cardano Token ADA Live Chart

But, in the last two weeks, ADA/USD has made a decent rally, increasing from around $0.78 to $1.20. This comes with an upgrade of the smart-contraact platform by Cardano’s developers, which goes by the name of Plutus. The development firm, Input Output Hong Kong, tweeted that the limit on Plutus’ per block script memory units has increased from 56 million to 62 million. IOHK assumes that the traffic on Cardano’s network could increase in the following months with the arrival of many new DeFi projects.

Besides that, yesterday we heard Cardano founder Charles Hoskinson talking about the Mamba protocol, including how it could foster a giant ecosystem on Cardano and revolutionize the business of sidechains. With the Alonzo upgrade, the Goguen era ended and the Basho phase of the Cardano roadmap began. With the new phase, IOHK is actively working on ways to optimize, scale and interoperate with other chains.

Cardano Daily Chart – Is the Trend Changing for ADA?

ADA climbs above the 100 SMA

This has helped the sentiment for the ADA coin, and now Cardano has moved above the $1 support zone and the 100 SMA (green) on the daily chart, which  acted as resistance before, during the decline. This looks good for Cardano, but we are looking to buy a retrace lower to the $1 level, with a stop below the previous low and a take profit target near the top. This would offer a good risk/reward ratio.