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Cardano jumps on scaling plans, goal $ 2

Key takeaways

  • Cardano has risen almost 50% over the past week.
  • IOHK has unveiled new plans to optimize the network.
  • Additional upward pressure could send the ADA to $ 2.

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Cardano has turned Solana into the fifth-largest cryptocurrency by market value after posting 47% week-over-week gains. New scaling plans appear to drive ADA's bullish price action.

Cardano becomes bullish on scaling news

Cardano is back in the green.

Input Output Hong Kong, the company that develops Cardano, has announced new plans outlining how it will scale the network in 2022. The goal is to increase the network's capacity and throughput with various parameter adjustments, improvements and other innovations.

The engineering and research company wants to prepare the smart blockchain contracts for a significant increase in usage, amid plans to deploy hundreds of thousands of users.

Some of the key expected on-chain upgrades are an increase in block size, the introduction of pipelining to reduce block deployment times, and input endorsers to expand the number of transactions per block. second. IOHK also plans to introduce side chains to enable tokens from one chain to be used in another and more resource-efficient process to process transactions from the main chain.

The new scaling initiatives appear to have been welcomed by market participants, as Cardano is one of the few large-cap cryptocurrencies starting Monday with a positive tone. ADA has gained nearly 12% in market value since the weekly opening and may have more room to go up.

The 3-day chart shows Cardano trying to overcome critical resistance at $ 1.55. Breaking such a crucial supply wall could encourage crypto enthusiasts to return to the market and drive the ADA toward the $ 1.90 three-day moving average of $ 1.90 or even the psychological $ 2 barrier.

Cardano US dollar exchange rate chart
Source: TradingView

Although a local bottom appears to have formed around the 200-three-day moving average, this remains the main level of support for Cardano. Any sign of weakness around the $ 1 demand zone may have the strength to invalidate the optimistic outlook. Under such circumstances, the ADA would be at risk of crashing to $ 0.65.

Disclosure: At the time of writing, the author of this piece owned BTC and ETH.

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