What’s Driving the Market Rally?

Cardano has increased by over 10.75% in the last 24 hours and is currently at $1.0481 after crossing the $1 barrier. This latest price action raises the question of whether Cardano’s historic 2021 bull run could be repeated.

Transaction volumes for Cardano (ADA) increased 23% to $1.62 billion, indicating renewed interest in the cryptocurrency. Crossing the $1 mark represents a psychological turning point for ADA after trading below that threshold for months.

Why is Cardano’s price increasing?

The recent jump in the token’s market price is likely due to both new updates to blockchain technology and increased overall optimism in the market. Blockchain also released its CIP-113 proposal on January 2, which will enable programmable assets, advanced security, and smart accounts. Cardano’s founder Hoskinson stated that with the Midnight update, the blockchain has turned into a multi-chain, multi-actor network.

It is preparing for the tokenization of Real World Assets in early 2025, a key aspect for the further expansion of blockchain technology. Additionally, Cardano has officially entered the Voltaire era, a critical step towards decentralized governance. Additions such as Mithril will also increase the node performance of the Cardano blockchain.

One such innovation is the optimization of the efficiency of DApps through incomplete transaction processing. It expands the user base thanks to its ability to process partial transactions. With increased trading activity and overall market recovery, ADA continues to move northward.

Cardano mimics 2021 bull run

Cardano’s recent rally has drawn comparisons to the 2021 bull run; on-chain metrics show an increase in daily and 30-day active addresses; This is a trend reminiscent of historic price growth. On-chain metrics and historical data provide interesting comparisons. The chart shows that ADA’s number of active daily and 30-day addresses increased severalfold, similar to the situation witnessed during the 2021 price boom. High network activity at the time coincided with ADA surpassing $3, which people hoped would raise Alonzo.

A snapshot of daily active addresses, 30-day active addresses, trading volume, and price trends over time highlights the recent increase in activity and the price exceeding $1. Retrieved from Santiment by Crypto.news.

While activity levels are not yet close to the highs reached in 2021, they are trending upwards, with support for the price rising above $1. While on-chain metrics hint at a possible repeat of the 2021 bull run, ADA’s progress in reclaiming previous highs will still depend on ADA’s continued adoption and broader market conditions. For now, all eyes are on ADA, which is passing through this critical phase.