The Cardano (ADA) price strong rally paused on Monday as investors reflected on the recent strong rally. ADA is trading at $2.1188, which was slightly below the day’s high of $2.2435. It has a market value of more than $68 billion and is the fourth biggest coin in the world.
It is relatively easy to explain why the Cardano price has jumped by more than 100% in the past few weeks alone. The main reason is that other coins, Bitcoin and Ethereum in particular, have been in a strong bullish trend as well. As a result, all other altcoins like Binance Coin and VeChain have also risen.
Another reason why Cardano has risen is a bit controversial. Recently, the team at IOHK has been working hard to bring smart contracts into the ecosystem. For starters, the smart contract technology is the one that allows other blockchain projects like Ethereum and Solana to support DAPPs.
This is a controversial reason since many watchers are sceptical about the introduction of smart contracts will have an impact in the system. For one, there are several blockchain technologies that allow developers to build these apps. Ethereum is the biggest player followed by Binance Coin, Polkadot, and Solana.
Therefore, there are concerns that Cardano is a bit late to get into the industry. Just last month, Mike Novogratz asked some questions about Cardano and whether there was any developer already building on it. It is still unclear about the projects running on Cardano, which makes its valuation significantly stretched.
The four-hour chart shows that the ADA price has been in a strong bullish trend. This was in line with my previous estimate. The coin found a strong resistance at $2.2485, which was the highest level since May this year. The coin remains above the 25-day and 50-day moving averages. It is also above $1.8875, which was the highest point on June 3. This makes this level a major support.
ADA also seems to be forming a major bullish consolidation zone. Therefore, I suspect that the coin will go through a significant pullback with the key reference point being $1.8875, which is about 10% below the current level. In the long-term, however, the coin will maintain its bullish trend as bulls target the YTD high at $2.46.