Why is Cardano (ADA) price up today?

Cardano (ADA) has steadily recovered, rising 36% since dropping to $0.83 on Dec. 30, 2024. The swift rebound has led to a bullish position above its 50-day simple moving average, possibly triggering its next leg higher.At the time of writing, ADA's price is trading at $1.30, which is up 5% over the last 24 hours.Let’s look at the factors driving ADA price higher today.ADA price rises alongside Bitcoin, EthereumThe bullish sentiment was not only exclusive to Cardano as crypto prices also recovered across the board, buoyed by Bitcoin’s return above the $100,00 level.Bitcoin (BTC), the largest cryptocurrency by market capitalization, led the gains and has jumped 8% over the last week to set a new three-week high of around $102,760 on Jan. 7. Ether (ETH) has risen more than 0.5% over the last 24 hours to trade above $3,660. Other top-cap cryptocurrencies, including BNB Chain’s BNB, XRP (XRP), and Dogecoin (DOGE), have also posted significant gains over the last 24 hours.Similarly, the total crypto market cap has increased by 2% over the last 24 hours and 10% year-to-date to $3.58 trillion at the time of publication.This performance comes from general positive sentiment in the cryptocurrency market, possibly influenced by broader economic factors or political events. For instance, with the upcoming inauguration of Donald Trump on Jan. 20, there’s increasing optimism that this could lead to a more friendly regulatory environment for cryptocurrencies, including ADA.Michael Saylor, an ardent Bitcoin advocate, has been quoted in social media posts suggesting that under Trump, there would be an end to the ”war on crypto” with more pro-crypto and pro-business policies.Cardano TVL recovers by 36%DeFi protocols on the Cardano Network have also significantly increased since Dec. 31, improving investor trust. Data from DefiLlama indicates that ADA’s total locked value (TVL) rose from $423 million to $579 million in seven days, marking 36.8% weekly gains.The rise in TVL was led by Liqwid (lending), Minswap (DEX), and Indigo (lending), which registered increases of 35%, 27% and 29% in locked value, respectively, over the past seven days.Cardano’s open interest (OI) has also increased by 10.75% over the past day, reaching $1.43 billion on Jan. 7, surpassing the $1.18 billion reached on Dec. 9. The current increase in OI coincides with price growth, which infers a continued interest from futures traders.Cardano’s onchain activity is also rising, evidenced by an increase in daily transactions, as per data from Artemis, and progress on the Lace Wallet, Midnight, and CIP-1694 projects.ADA price in a V-shaped recoveryADA’s price action has nurtured a V-shaped recovery chart pattern on the daily chart since Dec. 2, as shown below.A V-shaped recovery is a bullish pattern formed when an asset experiences a sharp price increase after a steep decline. It is completed when the price moves up to the resistance at the top of the V formation.ADA appears to be on a similar trajectory. It currently trades above a crucial demand zone between $1.00 and $1.12, where the 50-day simple moving average (SMA) is currently sitting.This suggests that increased buying from the current levels will likely see ADA price rise above the $1.23 neckline to complete the V-shaped pattern. Higher than that, the next logical move would be the $1.33 range high reached on Dec. 3, 2024, representing a 17% uptick from the current price.Several analysts are optimistic about ADA’s price recovery, with some setting targets as high as $15 for this cycle. However, X user “Best analysts” provided a more conservative prediction, saying that the pair could top at $5 this cycle. “Bullish prediction for Cardano (ADAUSD) suggests a potential rise to $3 and a cycle top at $5.”This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.