Why is Cardano (ADA) price up today?

Cardano (ADA) continued its recovery on Feb. 20, up 4.4% over the last 24 hours to trade above $0.79.ADA’s bullishness over the last two days has seen it bounce 9% from its $0.73 low on Feb. 18 to today’s intraday high of $0.79. The rebound has seen ADA recoup nearly all the losses made on Feb. 18, citing a possible shift in investor sentiment toward the layer-1 token.There are several factors driving the ADA price up today, including:The ratification of Cardano’s constitutionNetwork growth and an increase in TVL backs ADA’s upside.ADA’s classic technical pattern projects a rally above $3.50.Ratification of the Cardano constitution boosts ADA priceThe rally in ADA price comes after Cardano's Constitution was ratified to empower ADA holders with decision-making power and enhance network transparency.Key takeaways:In a live YouTube broadcast on Feb. 19, Cardano founder Charles Hoskinson announced that the Cardano Constitution had been officially ratified.The new constitution replaces its interim version that was introduced in June 2024.It establishes a structured governance framework that ensures all ADA holders play a direct role in shaping Cardano's future.The decision follows a successful community vote, with an 85% approval, surpassing the required 75% threshold. Commenting on the new development, the Cardano Foundation said:“This milestone sets the foundation for onchain governance, ensuring clear rules, transparency, and accountability in decision-making.”The new Constitution is set to be fully enacted on Feb. 23, marking a major step forward in decentralizing decision-making and promoting community-driven development.Describing Cardano’s governance evolution, Hoskinson said:“That means Cardano is basically a government, a living thing.”This move is seen as a significant step toward a self-sustaining ecosystem, potentially boosting investor confidence. A clear, community-driven governance model could attract more participants and developers, increasing demand for ADA and driving its price upward.​​Cardano TVL recovers by 22%DeFi protocols on the Cardano Network have also significantly increased since Feb. 8, improving investor trust. Cardano’s total locked value (TVL) rose from $313.6 million to $383.7 million in eight days, marking 22.4% weekly gains, as indicated by data from DefiLlama.The rise in TVL was led by Splash Protocol (market maker), lenFi (Lending), and Indigo (lending), which registered increases of 125%, 5% and 29% in locked value, respectively, over the past seven days.Cardano has also witnessed a considerable increase in onchain activity, evidenced by an increase in daily transactions since Feb. 8,, as per data from Artemis.Cardano’s open interest (OI) has also increased by 17% over the same period, reaching $710 million on Feb. 20, inferring a continued interest from futures traders.ADA price nurtures a V-shaped recoveryADA’s price action has been nurturing a V-shaped recovery chart pattern on the daily chart since Jan. 17, 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, also known as the neckline.ADA appears to be on a similar trajectory and now trades below a supply-demand zone between $0.90 and $0.98, where the 50-day and 100-day simple moving averages (SMAs) appear to converge.This suggests that bulls need to push ADA above this level in order to increase the chances of the price rising to the neckline at $1.167 to complete the V-shaped pattern.Higher than that, the next logical move would be the multi-year $1.33 range high reached on Dec. 3, 2024.This would represent a 48% uptick from the current price.The relative strength index has increased from oversold conditions at 25 on Feb. 9 to 46 on Feb. 20, suggesting that the bullish momentum is picking up.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.