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Cardano (ADA) recently hit a new all-time high with the rally. The price of the altcoin had surged past $2.5 on Friday to set a new trading record. While the market awaits the release of the Alonzo Purple Hard Fork that would bring smart contracts capability to the network, indicators have shown that the price is nowhere near the end of its run. The increased interest in the project shows that the coin will continue to grow. But just like any asset, there are things that could hinder this growth. This is what crypto analyst, Benjamin Cowen, has taken time out to explain.
Related Reading | Cardano (ADA) Cracks New $2.5 All-Time High, Is $3 Possible?
Smart Contracts Are Pushing Cardano (ADA) price
Crypto analyst Benjamin Cowen attributes the recent growth of the digital asset to two things. First is the smart contracts capability that is set to be launched on September 12th. This would put the Cardano network on a level high enough to compete with its biggest rival, Ethereum.
ADA breaks new all-time high | Source: ADAUSD on TradingView.com
The number 2 reason Cowen gives for the price run-up is Bitcoin’s current movement. According to Cohen, Bitcoin resting above the 20-week SMA (simple moving average), and then going sideways has been a big factor for the rally. Bitcoin being at this point puts ADA in a position where the path of least resistance is upwards. Thus, the price of the asset has been driving upward.
Bitcoin’s simple moving average plays a key role in Cowen’s analysis of this bullish setup. The SMA is a critical key that would either make or break the bullish setup in ADA.
Bitcoin Is The Key To $4
Benjamin Cowen took to his YouTube channel to talk about what could hinder the bullish setup of Cardano (ADA). Cowen pointed out that the price was set to explode with the current setup. But this uptrend would depend greatly on Bitcoin. Bitcoin staying above this key level would see the price of ADA going up.
Related Reading | Cardano (ADA) Steadies Above $2 As Bulls Continue To Aim For $2.5
“The only thing now that you should be rooting for if you want to see ADA breakthrough to, say, the $3 mark, the $4 mark, what do you want to see happen?” Cowen asked. Answering his own question, Cowen explained that Bitcoin staying above the 20-week SMA (simple moving average) is key to ensuring this setup realizes its full potential. “What you want to see happen is you want to see Bitcoin just kind of hang out. Just have Bitcoin chill above the 20-week simple moving average.” Cowen further went on to add, “if we get it, then the past of least resistance for ADA IS UP.”
Bitcoin’s movement, Cowen says, is very important to understanding Cardano’s (ADA) movement. “To get an idea of what ADA is doing, you need to look at what Bitcoin is doing.”
Featured image from Arabian Business, chart from Trading View.com