The ADA price could be set to soar after crypto giant Grayscale Investments adds Cardano to its large-cap crypto fund. ADA is now the third-largest holding.
Cardano is trading at $1.4160, down $0.045 (-3.10%).
Cardano ranks as the 5th largest cryptocurrency by market cap. It’s $45.9 billion (at the time of writing) valuation puts it behind the fourth-ranked Binance coin (BNB), which currently has a market capitalization of $46.2 billion.
Although, Cardano could soon claim BNB’s position on the list, following the announcement that Grayscale investment trust has included ADA into its Digital Large-cap cryptocurrency fund.
The digital asset manager announced the fund would be rebalanced. Moreover, Grayscale will adjust the Ethereum, Bitcoin, Chainlink and Bitcoin cash holdings to make way for Cardano. Furthermore, ADA becomes the largest holding, after Bitcoin and Ethereum.
This is clearly a positive development for the ADA price. Because many institutions are not allowed to trade cryptocurrencies, Grayscale ETF’s offer an attractive method for them to gain exposure to the crypto market. Therefore, Cardano is perfectly positioned to benefit from an uptick in institutional demand.
The daily chart illustrates ADA’s impressive price performance over the last two weeks. On the 22nd of June, ADA broke below $1.0000 for the first time since May’s cryptocurrency crash. The sell-off took the price below the important 200-day moving average at $1.0940. However, Cardano reversed the intraday loss and closed above the critical indicator.
This fired the starting pistol on a 51% rally to yesterday’s $1.4980 high. Moreover, the bullish price-action cleared the 50, and 100-day moving averages at $1.4480 and $1.3787.
Unfortunately, this morning, ADA slipped back below the 50 DMA.
This is likely because the Bitcoin price retreated around $1,000 in the last 24-hours, which has tempered the bullish ADA price momentum.
Having said that, in isolation, Cardano is looking good. If the price can convincingly clear the 50 DMA, it should extend to the 13th of June high at $1.6500. Furthermore, If BTC sustains a rally, ADA could exceed $1.6500 and target the 3rd of June’s $1.8500 high.
Of course, if the broader market turns lower, it will harm Cardano. And if ADA loses the support of the 100 DMA at $1.3787, it suggests the price will move lower in the near term.
On that basis, the bulls should wait for a confirmation on today’s close. A green candle above $1.4480 on the daily chart would signal the rally is still on.
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