Rose 6 times more than Bitcoin... What's the secret behind Cardano (ADA)'s surge?

▲ Cardano (ADA)/AI Generated Image ©

Cardano (ADA) has shown a steep rise, outperforming Bitcoin (BTC), driven by expectations for a major network upgrade and accumulation by large whale investors. This surge was further amplified by a large-scale short squeeze (buying pressure resulting from the liquidation or covering of short positions), with the market now focusing on whether key resistance levels will be broken in the future.

According to the cryptocurrency market aggregator CoinMarketCap on July 3 (local time), the ADA price surged by 11.57% compared to 24 hours prior, reaching $0.17914. This significantly surpassed Bitcoin's return, which only rose by 1.79% during the same period, demonstrating ADA's unique presence in the recent cryptocurrency market.

The most powerful driving force behind this surge is the imminent Protocol Version 11, also known as the van Rossem hardfork upgrade. Global major exchanges such as Binance and Coinbase are reportedly already technically prepared for its operation, awaiting only the final approval from the Constitutional Committee. Once this upgrade is complete, network utility is expected to be significantly enhanced, including reduced smart contract costs and the introduction of Zero-Knowledge (ZK) cryptography technology.

Movements in the derivatives market and aggressive buying by whales also fueled the rally. During the price increase, short positions worth $857,140 were forcibly liquidated, while long position liquidations amounted to only $158,490, indicating strong buying pressure. Furthermore, large investors, referred to as whales, have actively accumulated over 150 million ADA since late June, intensifying a supply shortage as the circulating supply on exchanges decreased.

While short-term market outlooks are somewhat mixed, the momentum remains alive. Currently, the Relative Strength Index (RSI) is at 75.85, indicating an overbought technical zone. However, if the 20-day Exponential Moving Average (EMA) support level of $0.17 is firmly maintained, there is a high possibility of further upward movement towards the 50-day EMA resistance level of $0.1858. Conversely, if profit-taking pressure pushes the price down from current levels, it could see a correction to support levels between $0.14 and $0.15.

In conclusion, this rally is interpreted not merely as a speculative trend but as a result of actual technological upgrades combined with improved supply and demand. Experts suggest that whether ADA can decisively break through the $0.1858 resistance level with high trading volume, alongside news of the Constitutional Committee's final approval, will be a turning point for a significant trend reversal in the future.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*