Cardano’s recent network upgrade, there has been a notable rise in daily active addresses. Data from Santiment reveals that on September 5th, the number of daily active addresses reached over 52,000—a level not seen in more than five months. Although this figure fell to about 39,400 the next day, it was still significantly higher than the average observed since May. By September 7th, the number of active addresses had further declined to approximately 31,600.

This spike in network activity suggests that the upgrade might be starting to attract more users and increase engagement within the Cardano ecosystem. The surge in active addresses could be a sign that the improvements made by the upgrade are beginning to have a positive effect on user participation.

Impact on ADA’s Price

Despite the increase in network activity, ADA’s price has struggled to gain traction. The token has been in a downtrend for some time, but recent data indicates a slight recovery. As of the latest update, ADA is trading at approximately $0.33, reflecting a 2.7% increase over the past 24 hours. This follows a previous 3.4% rise, marking the first time in two weeks that ADA has shown consecutive gains of over 2%.

If ADA can sustain this upward momentum, it could signal the beginning of a shift from its current downtrend to a potential bullish phase. The ability of ADA to maintain this positive trend will be crucial in determining whether the recent increase in network activity translates into a sustained price breakout.

Technical Analysis and Indicators

To assess ADA’s potential for a price surge, it’s important to consider technical indicators and trends. The Relative Strength Index (RSI), a key metric used to evaluate price momentum, currently stands at around 46. This indicates that ADA is not yet in bullish territory, but the RSI’s movement closer to the neutral line suggests a possible shift in momentum.

For ADA to transition from its downtrend to a bullish phase, several conditions must be met:

1. Resistance Levels: ADA needs to break through key resistance levels and maintain its upward trajectory. Overcoming these resistance points will be essential for confirming a bullish reversal.
2. Technical Indicators: Continued positive movement in the RSI and other technical indicators will be necessary to support the case for a potential breakout.
3. Trading Volume: Increased trading volume is crucial for sustaining any price gains. A higher volume would provide the support needed for ADA to maintain a positive trend.

Volume Trends and Implications

Cardano’s trading volume has been relatively stable, typically ranging around $300 million, with occasional peaks reaching up to $340 million. As of the latest data, ADA’s trading volume stands at approximately $160 million. For ADA to break free from its current downtrend and establish a sustained bullish trend, a significant increase in trading volume will be required.

A convergence of rising price and trading volume is crucial for validating any short-term gains. If ADA’s trading volume increases alongside its price, it could help solidify a positive trend and support a potential breakout.

Market Sentiment and Future Prospects

The recent increase in Cardano’s active addresses suggests a growing interest in the platform. However, translating this surge in network activity into a lasting price increase will depend on several factors:

1. Sustained Positive Momentum: ADA must continue to show positive price movement and overcome resistance levels to confirm a bullish trend.
2. Enhanced Trading Volume: Higher trading volumes will be necessary to support and sustain any price gains.
3. Broader Market Trends: General market sentiment and trends will also play a role in determining ADA’s future performance.

Conclusion

Cardano’s recent network upgrade has led to a significant increase in daily active addresses, indicating a rise in user engagement and interest in the platform. While ADA’s price has shown some signs of recovery, it remains in a downtrend with key resistance levels to overcome.

Investors and analysts will need to monitor ADA’s performance closely to determine if the increased network activity will translate into a sustained price breakout. With the right conditions and continued positive developments, Cardano could potentially shift from its current downtrend to a more bullish phase.