Cardano: From ‘Ghost Chain’ Accusations to a 20% Price Increase – What’s Happening?

Cardano's [ADA] has kicked off the new year with remarkable momentum! The pace is returning, but not without the usual doubts. Will this increase last, or is it merely a temporary reaction to positive developments?

Key Takeaways

Upward Momentum: Cardano (ADA) is experiencing a notable price increase, reaching close to $0.40 after starting from the mid-$0.30s.
Leios Upgrade: The Leios upgrade is making progress, with important metrics indicating over 67% completion for key proposals.
Grayscale Rebalancing: Grayscale's recent portfolio rebalance has positioned ADA as a major player in its Smart Contract Fund at 18.55%, just behind Ethereum (ETH) and Solana (SOL).
Market Dynamics: While selling pressure is evident, traders remain active, and the future of ADA's momentum is uncertain.

Cardano

Cardano's recent surge in price can be attributed to two key factors: progress on its Leios upgrade and a significant portfolio adjustment by Grayscale. While there are signs of slowing momentum in the recent price rally, trading volumes remain encouraging, indicating continued trader activity.

Progress on the Leios Upgrade

The excitement surrounding Cardano largely stems from advancements related to its Leios upgrade. A recent update shared on X highlights that IOG’s tracker shows tangible progress in the development of this upgrade.

Cardano

According to reports, the primary improvement proposal is currently 67% complete, while the technical design phase is at 46%. Although initiatives like achieving 1,000 transactions per second and launching a testnet are still in early development, there are clear plans in place.

It's important to note that the Leios upgrade will be a long-term project, extending into 2026, which reinforces the confidence among ADA holders.

A Significant Boost of Confidence

Cardano has received another lift from Grayscale's latest portfolio reallocation.

Cardano

In this latest adjustment, ADA accounts for 18.55% of the Grayscale Smart Contract Fund, ranking just behind Ethereum (ETH) at 29% and Solana (SOL) at 29.55%. This is significant given the fund's focus on long-lasting smart contract platforms, and it greatly enhances ADA's credibility in the market.

Is the Surge Slowing Down?

The recent price rally of ADA has been impressive, pushing towards the $0.40 mark after advancing from the mid-$0.30s.

However, market charts indicate that this price level is proving to be a critical area, with some selling pressure beginning to appear. Notably, the Relative Strength Index (RSI) hovered around the neutral position of 50, while the Chaikin Money Flow (CMF) dipped slightly below zero, signaling diminishing capital inflows following the surge.

Cardano

Source: TradingView

Despite healthy trading volumes suggesting continued activity among traders, the market appears uncertain about the sustainability of this upward movement.

Final Thoughts

In conclusion, while Cardano's recent price increase has generated optimism, concerns about how long it will last linger. As developments continue with the Leios upgrade and ADA gains traction in significant funds like Grayscale’s, all eyes will remain on this cryptocurrency's next moves.