Cardano Price Analysis Ahead of the Spot ADA ETF Approval - The Market Periodical

Key Insights

• Cardano price has rebounded modestly in the past few days.
• There is speculation that the SEC will approve the first spot ADA ETF this quarter
• The network will launch the Midnight mainnet later this quarter.

The Cardano price has rebounded over the past few days, rising from a low of $0.3310 on December 31st to its current level of $0.4125. This rebound may continue in the coming months as traders await the approval of the first ADA ETFs and the launch of the Midnight mainnet.

Cardano Price May Benefit From the Spot ADA ETF Approval

ADA price has risen by 25% from its lowest level this year as the crypto market rally accelerated. This rebound coincided with the performance of Bitcoin and other altcoins.

Cardano could continue doing well in the coming months as the Securities and Exchange Commission (SEC) considers the first Grayscale Cardano ETF (GADA) in the first quarter.

The SEC, under the leadership of Paul Atkins, has been open to approving altcoin ETFs in recent months. It has already approved the XRP ETF, which has accumulated over $1.25 billion in inflows and $1.65 billion net assets.

It also approved several spot Solana ETFs, which have accumulated $801 million in inflows and recently crossed the $1.1 billion market in assets. The other altcoin ETFs were on tokens like Dogecoin, Chainlink, Litecoin, and Hedera Hashgraph.

A spot Cardano ETF would be bullish for the token as it would lead to more demand from American retail and institutional investors. However, it is unclear whether the funds will be as popular as XRP and Solana, or if they will flop like Litecoin and Hedera.

Midnight Network Mainnet Launch

The approval of the Cardano ETF spot will likely coincide with the much-anticipated mainnet launch.

Midnight is an upcoming sidechain on Cardano that aims to capitalize on the ongoing privacy theme in the cryptocurrency industry.

The network, currently in testnet, will utilize zero-knowledge proof technology to enable developers to build privacy-focused applications.

Data on its website indicates that the testnet is progressing well, with the number of produced blocks rising to over 3.2 million, while the number of transactions has increased to over 618,000 in the past few weeks.

Most importantly, the recently launched NIGHT token has continued to experience demand from investors, a trend that is expected to accelerate after the mainnet launch.

Data show that the NIGHT token has achieved a market capitalization of over $1.3 billion, with a daily volume averaging over $50 million.

Midnight’s success will be beneficial for Cardano, as it will help address one of the biggest challenges the project has faced over the years. The challenge was that Cardano has always been seen as a ghost chain that no one uses.

Leios Upgrade and Key Cardano Improvement Proposals

The other notable catalyst for Cardano price is that the developers are working on the Leios upgrade, which will likely be launched this year.

Leios aims to boost the transaction speeds by introducing parallel processing. While Cardano will still be slower than other popular chains, such as BNB Smart Chain, Near, and Solana, the developers hope that the speeds will be adequate for most users.

In a statement, a popular Cardano page on X noted that the current simulation shows that Leios is handling approximately 200 transactions per second (TPS) on average and 1,000 TPS for smaller transactions. These will be major improvements as Cardano currently handles a few transactions per second.

Cardano is also implementing a major proposal to bring more stablecoins, oracles, and analytics tools to the network.

Cardano Price Technical Analysis

The daily timeframe chart shows that Cardano price bounced back this year, moving from a low of $0.3309 to $0.4100.

However, while this rebound is good, it remains much below the 50-day Exponential Moving Average (EMA) and the Supertrend indicator.

Additionally, the Average Directional Index (ADX) has been trending downwards, decreasing from a high of 47 on November 25 to its current level of 27.

Therefore, the token is likely to continue falling as sellers target the next key support level at $0.3310, its lowest level as of January 1.