Why is the price of Cardano (ADA) up 16% today?

TL;DR

Cardano (ADA) made a strong comeback, rising to a 14-week high after a double-digit daily gain. The generally bullish market, among other reasons, has potentially boosted the increase in assets. Returning to the Top 10 Club

Cardano (ADA) experienced a remarkable resurgence in the past 24 hours, with its price increasing by approximately 20% at one point. It briefly topped $0.44, the highest level seen since July.

ADA is currently trading around $0.43, while its market cap is well over $15 billion. This means that the asset overthrew Tron (TRX) to become the 10th largest in the entire crypto sector.

ADA price, Source: CoinGecko

One potential factor driving ADA’s impressive rally could be the overall bullish market environment. Most of the major cryptocurrencies have been making gains since Donald Trump won the US presidential election. Bitcoin (BTC), for example, hit a new all-time high of over $76,800.

Another element that possibly contributes to the revival of the sector is the Federal Reserve’s decision to reduce interest rates by 0.25%. This move makes it cheaper to borrow money and could increase interest in risky assets like cryptocurrencies.

ADA’s double-digit price increase coincides with several indicators in the chain flashing bullish signals. The “In the Money” metric, which measures the change in the number of Cardano investors currently holding paper profits, has increased by 13%. At the moment, 36% of token holders are in the green, while 58% remain underwater.

In August of this year, ADA’s percentage of profitable investors dropped to almost 0%. The asset’s valuation then fell below $0.30.

Last but not least, we will focus on high transaction volume (where each ADA transaction on the chain exceeds $100,000). The figure reached $8.5 billion on November 8, representing a 13% increase in 24 hours.

Is FOMO coming soon?

Market intelligence platform Santiment noted the ADA bombshell, suggesting that “some retail FOMO” could follow.

“This has been a long time coming for the ADA patient community,” the organization added.

Fear of missing out is a psychological phenomenon in which people feel anxious about taking action because they worry about missing out on an opportunity that others are currently experiencing.

As more investors rush to jump on the bandwagon, the value of the asset can explode. Each jump makes more people worry about losing potential gains, fueling additional demand.

With FOMO-driven buying, however, prices can fluctuate wildly. Volatility often increases as some early investors begin to take profits, prompting mini-sell-offs. This can turn into a cycle of panic selling, causing substantial declines.

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