TL;DR
- Cardano sees significant increase in active addresses following latest update.
- The ADA cryptocurrency remains in a downward trend, but with signs of recovery.
- Trading volume remains key to confirming a sustained uptrend.
Cardano has captured the attention of the crypto community following its latest network upgrade earlier this month.
Despite not seeing an immediate impact on either price or network activity, active ADA addresses have shown a notable increase in recent days.
📊 As traders await a potential Bitcoin/crypto rebound, Cardano, Quant, and Holo are three notable assets seeing a sudden surge in address activity. When coins that are declining in value suddenly see rises like these, it historically raises the likelihood of a bounce. 📈 pic.twitter.com/udBULCmZYa
— Santiment (@santimentfeed) September 7, 2024
According to data from the Santiment platform, more than 52,000 active addresses were registered on September 5, the highest level in more than five months.
While that number dropped to 31,600 as of September 7, it still marks a significant resurgence in activity within the Cardano ecosystem, which could indicate that the improvements introduced to the network are beginning to resonate with users.
This spike in active addresses suggests renewed interest in Cardano, which could translate into an increase in the platform’s utility in the coming weeks.
Despite this increase in activity, the price of ADA continues to show a downward trend, closing around $0.32 on September 7, although it registered a slight increase of 3.4%.
The next day, ADA reached $0.33, showing a further gain of 2.7%.
If Cardano manages to maintain this positive momentum, it would be the first time in two weeks that the cryptocurrency has recorded consecutive increases of more than 2%.
Technical analysis also provides some positive indications.
ADA’s Relative Strength Index (RSI) has approached the neutral line, standing at around 46.
Although it has not yet reached bullish territory, its recent move towards neutrality could be an indication that Cardano is close to breaking out of its downtrend, as long as trading volume accompanies this move.
Cardano Volume and Uptrend
To consolidate an uptrend, it is crucial that ADA trading volume shows a significant increase.
Over the past few weeks, volume has hovered around $300 million, peaking at $340 million at some points.
While these activity levels are decent, a considerable increase in volume will be needed for the ADA price to break out of its downtrend on a sustained basis.
As of now, Cardano’s trading volume is at $160 million, a figure that, while significant, is still not enough to trigger a complete market reversal.
If the increase in the price of ADA is accompanied by an increase in trading volume, an upward trend could be consolidated that would take the cryptocurrency to new levels.
Historically, when a cryptocurrency like ADA experiences an increase in address activity, even in the midst of a downtrend, there is a higher likelihood of a price bounce occurring.
However, this rally will largely depend on how trading volume evolves in the coming days.
