Cardano (ADA) Price Surges to Monthly High — Liquid Staking on the Horizon
How Will Liquid Staking Affect the ADA Price? | Credit: Hameem Sarwar
Key Takeaways
- Helix Labs completed a successful pre-seed funding round.
- The project aims to bring liquid staking to the Cardano ecosystem.
- How will the Cardano (ADA) price respond to the news?
The Cardano (ADA) price fell considerably after its yearly high in March but has shown some signs of a recovery beginning in August. Then, the price of ADA created its first higher low in September.
After some positive Cardano news regarding liquid staking, the price broke out from a short-term resistance. Can ADA build on this momentum, break its long-term resistance, and confirm the trend reversal? Let’s find out
Cardano Liquid Staking
On Sept. 23, Helix Labs announced it had raised $2 million at a pre-seed funding round at a valuation of $40 million. Tribe Capital, EMURGO Ventures, and Taureon Capital headed the funding.
The project aims to integrate Cardano into Decentralized Finance (DeFi), unlocking nearly $13 billion in liquidity.
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Heliz Labs will provide ADA holders with liquid staking, enabling them to stake ADA and receive a liquid-staked ADA token in return. Then, they can utilize the liquid-staked token across Decentralized Finance (DeFi) platforms.
Helix Labs will offer three main products: The Helix Vault, the UniRollup Layer-2 platform, and OmniVM AVS. These will make assets more accessible, help ADA integration with DeFi protocols, and provide liquidity to new projects.
The ADA price increased after the announcement and reached a new monthly high on Sept. 24.
Will ADA Increase?
The weekly time frame chart shows that ADA completed a five-wave increase starting in May 2021. It has corrected since, losing 55% of its value.
Despite this, ADA began a short-term upward movement on Aug. 5, creating a higher low in September. The movement also validated the support trend line of a descending parallel channel.
This week, ADA moved into the channel’s upper portion, making a breakout more likely. If that happens, the next resistance will be at $0.54, created by the 0.5 Fibonacci retracement resistance level and a horizontal area.
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Weekly indicators are rapidly turning bullish. After generating a bullish divergence, the Relative Strength Index (RSI) has nearly crossed above 50, while the MACD already made a bullish cross (black circle). So, both predict that a significant upward movement is incoming.
So, the price action and indicator readings from the weekly time frame both suggest a breakout will occur.
ADA Breaks Out
The shorter-term six-hour chart supports this possibility since it shows a breakout from a descending resistance trend line.
The trend line has existed since July, and the breakout from it indicates that the ADA price has finished its short-term correction.
Combined with the weekly time frame readings, it suggests that ADA will reach the long-term channel’s resistance trend line, coinciding with the minor $0.40 resistance area.
Because of the bullish long-term readings, a breakout from it is likely, taking data toward the $0.54 resistance area.
ADA Price to $0.54
The long- and short-term charts for ADA provide a bullish outlook, aided by positive Cardano news regarding liquid staking. Therefore, a breakout from the long-term channel will confirm the trend reversal and lead to an increase toward $0.54.
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