Why did Cardano (ADA) price increase this week?
Cardano (ADA) showed a strong recovery in the last 24 hours, rising more than 8.50% to 0.363 Nov. .
ADA/USD four hour price chart. Source: TradingView
ADA's gains largely coincided with the conclusion of the fourth Cardano Summit 2024 in Dubai. Additionally, they emerged alongside the latest US jobs data showing a low unemployment rate in October.
The Cardano Summit raises the value of ADA
ADA's rally today may stem from positive sentiment surrounding several key developments and announcements at the 2024 Cardano Summit.
For example, EMURGO, a blockchain organization promoting Web3 adoption on the Cardano network, has partnered with BitcoinOS (BOS), a smart contract platform for Bitcoin, to bring Bitcoin's $1.3 trillion liquidity to Cardano's DeFi ecosystem.
The 2024 Cardano Summit featured high-profile speakers and partnerships with entities such as Binance and Animoca Brands.
Large events like the Cardano Summit often create speculative interest, with traders and investors buying in anticipation of announcements that could increase the value and profitability of the network.
The benefits of a low unemployment rate put assets at risk
ADA's rally over the past 24 hours has reflected in the risk market, and the odds of a rate cut have increased following the latest US jobs report.
Notably, U.S. employment grew at the slowest pace since 2020 in October, with nonfarm payrolls adding just 12,000 jobs — a slowdown partly due to hurricanes and a major strike at Boeing.
US labor market data for October. Source: Bureau of Labor Statistics/Bloomberg
However, the unemployment rate remained stable at 4.1%, and average hourly earnings showed a slight increase, the Bureau of Labor Statistics reported on November 1.
The jobs report will serve as the last key economic indicator before next week's Federal Reserve meeting and the November 5 presidential election.
According to CME data, the probability of a 25 basis point rate cut in November rose to 98.9%, up from 94.8% before the report was released.
Target rate odds for the November 7 Fed meeting. Source: CME
Low rates generally increase market liquidity and support asset appreciation, creating a “risk-on” environment where investors seek returns in high-risk markets, including crypto.
ADA, as a major altcoin, will benefit from this influx of capital as it mirrors the rally seen in stocks and other risky assets.
Cardano price eyes 35% rally by 2025
Cardano's gains today are part of a technical renaissance. As shown below, the cryptocurrency has gained more than 15.50% in a week after testing its multi-month rising trend line support.
ADA/USD weekly price chart. Source: TradingView
In the past, ADA has seen significant price corrections from similar support levels, the most recent being a 50%-plus gain in August. However, gains were capped by the 50-week (red) and 200-week (blue) exponential moving averages (EMAs).
Because of this fraction, ADA is now about 15% higher than November's price level at the 50-week EMA of around $0.424. If it breaks above the 50-week EMA, the next potential target could be the 200-week EMA at around $0.477 later this year.
Related: Is crypto ‘altseason' coming? Watch for these 3 key signs in the coming months
Interestingly, the 200-week EMA, which is up 35% from current prices, coincides with ADA's multi-year downtrend resistance.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
