The native token of the Cardano ecosystem, ADA seems stuck between a rock and a hard place. On the upside, Cardano price movement is capped under the seller congestion zone at $0.40, while support at $0.35 appears strong enough to keep the uptrend in place. Despite the temporary hold in that range, ADA price may eventually break out to the all-time high of $3.15, with the support of Djed’s launch – the first stablecoin on the Cardano blockchain.
Investors are preparing for the expected launch of Djed by filling their wallets with ADA. Price data from CoinMarketCap shows a 42% spike in volume to $379 million even as Cardano price consolidates between $0.35 and $0.40.
Analysts often interpret increasing volume to mean a spike in accumulation among investors. It signals high expectations from investors that Cardano price will eventually break out to the upside. That said, it is possible that a minor push above $0.40 could open the door to gains above $0.6 and $1.00, respectively in the next few weeks.
Overcollateralized Stablecoin Djed To Go Live This Week, But Will Cardano Price Rally?
The first stablecoin on the Cardano blockchain is set for its debut this week amid increased anticipation from the community and investors. This launch was announced by Coti network, a DAG-based Layer 1 protocol, developing the stablecoin in collaboration with Cardano’s developer, Input Output Global (IOG).
Djed is expected to go live on several exchanges including these decentralized exchanges (DEXs) in the Cardano ecosystem; MuesliSwap and MinSwap. According to data from DeFi Llama, MinSwap is the most significant DEX Cardano’s DeFi sector, with $31.54 million in total value locked (TVL). MuesliSwap comes fifth with $6.5 million in TVL, behind Indigo, WingRider, and SandaeSwap.
The stablecoin has been designed to keep its value relatively stable backed by other tokens. It stands out for requiring 400% in collateralized value ahead of its debut. IOG and Coti decided to overcollateralize Djed to prevent a repeat of Terra USD, the stablecoin that sent the crypto market into a tailspin in May 2022, after it lost its dollar peg and crashed uncontrollably.
In addition to the listings on MuesliSwap and MinSwap, Djed will go live on more than DeFi applications (dApps) within the Cardano ecosystem and at the Bitrue exchange. It is expected to launch alongside, DjedPay, an application that will support payments, enabling users to seamlessly spend their digital assets on various merchants and businesses globally.
✅Trading starts soon
✅Stay tuned for exclusive events!
— Bitrue (@BitrueOfficial) January 24, 2023
Assessing the Bullish Outlook In Cardano Price
Cardano price stopped shy of the seller congestion zone at $0.40, resulting in an ongoing pullback. Crypto analysts had anticipated a breakout above this level to catalyze another bullish move to $0.6 and $1.0, respectively.
ADA price might push for the immediate resumption of the uptrend if a short-term buyer congestion zone at $0.38 absorbs the selling pressure and prevents the leg from stretching to $0.35.
Bulls must work toward a daily close above the falling upper trendline and subsequently weaken resistance at $0.40 to keep the uptrend intact. Nevertheless, Cardano price is not the only crypto asset facing rising selling pressure. Analysts believe that the market is factoring in expectations toward the United States Federal Reserve decision on the interest rates in two days.
Weak hands getting shaken out, market awaits FOMC in two days. Glad to see a fake dump to shake out weak hands before the next leg up in the coming days.
Market makers playing ping pong with you.
— Doctor Profit (@DrProfitCrypto) January 30, 2023
It is possible that weak hands are being liquidated ahead of another bullish breakout to usher in February. Support at $0.35 is in line to arrest declines if selling pressure intensifies due to the liquidations.
From the daily chart, we can confirm an optimistic outlook for Cardano price with two of the major moving averages trading the eighth-largest crypto. The 50-day Exponential Moving Average (EMA) (in red) will strengthen the bullish grip if it crosses above the longer-term 100-day EMA (in blue).
Traders should also follow the position of the Money Flow Index (MFI) indicator to help determine the next direction Cardano price may take. The MFI holds horizontally at the lower range of the overbought region. If it falls into the neutral zone, extended declines would be the most likely outcome. On the other hand, a spike toward the upper range of the overbought area would nurture the uptrend.
Will Cardano Price Reach $10 In 2023?
Cardano is one of the largest cryptocurrency ecosystems in the world. It has over the years grown to support smart contracts, enabling a thriving DeFi sector where $76 million is currently locked on different platforms like MinsSwap.
The introduction of the Djed stablecoin has the potential to increase value growth within the ecosystem. Stablecoins are highly sought after because they enable the faster and cheaper transfer of value in addition to providing liquidity and ensuring stability.
Djed’s launch will positively impact the TVL in Cardano’s DeFi sector. Although Cardano is the eighth-largest cryptocurrency, its TVL ranks 27th among other blockchains. Djed has the potential to attract more value to the network, thus making Cardano attractive to investors. Tron DAO’s TLV massively grew after the launch of a stablecoin in May 2022 and now comes in second position after Ethereum.
It's exciting to see things moving so quickly in the Cardano ecosystem. Sidechains are coming along including Cosmos, djed is launching soon, Hydra and Mithril on schedule, Lace almost out of beta, tons of DApps coming online. pic.twitter.com/qU81S5uHzK
— Charles Hoskinson (@IOHK_Charles) January 28, 2023
With that in mind, the launch of Djed will be a positive signal for Cardano as an ecosystem and its native token ADA. Meanwhile, a price rally to $10 could be challenging in 2023 but investors can expect gains possibly to the all-time high of $3.15. If the developments planned by IOG in 2023 continue as expected, Cardano price might surpass this level to reach a new record high.
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