Cardano price surged to a high of $1.175 on Monday, its highest level since December 12 last year. At its highest point, the ADA price was up by over 130% from its lowest level in February.
Cardano price jumps as US strategic reserves hopes rise
Cardano jumped after Donald Trump named it as one of the top cryptocurrencies that will be part of the crypto strategic reserves. Pro Cardano analysts have cheered the decision, making the case for the network, including the fact that ADA token holders ratified its on-chain constitution, has 100% uptime, and is interoperable with Bitcoin.
Donald Trump’s endorsement means that the Securities and Exchange Commission (SEC) will approve a spot Cardano ETF. The odds that the ETF approval will happen rose to 70%, up from just 13% in January.
A spot ADA ETF would be a good thing for Cardano as it would let American investors allocate cash to it without needing keys. Spot Bitcoin and Ethereum ETFs have had over $40 billion and $2.6 billion in inflows since their inception.
ADA tokens like Minswap, Indigo, and Snek jumped
Cardano’s surge triggered a big move among tokens in its ecosystem. Minswap, the biggest DEX network on the network, surged by over 52%, giving it a market cap of over $53 million. Its 24-hour volume soared to $114 million.
Indigo Protocol (INDY) price rose by 45% on Monday, bringing its market cap to over $27.6 million. Indigo is part of Cardano’s ecosystem that aims to provide tokenization solutions in the blockchain industry.
It has a total value locked of over $90 million, making it one of the biggest players in the Cardano ecosystem. Some of the top tokens in the ecosystem are iETH, iUSD, iSOL, and iBTC. These tokens track tokens like Ethereum, Tether, Solana, and Bitcoin.
Snek, the biggest meme coin in the Solana ecosystem, surged by 40% on Monday, giving it a market cap of over $342 million.
Will these Cardano tokens surge continue?
Unlike popular blockchains like Ethereum, BNB Smart Chain, and Solana, Cardano tokens are significantly small and illiquid. Most of them are not even listed in popular centralized exchanges like Coinbase and Binance. Minswap is only listed on MEXC and CoinEx, with the rest being traded on Minswap itself. Snek, a big meme coin in Cardano, trades on exchanges like Gate.io, MEXC, and CoinEx.
Therefore, the most likely scenario is where tokens like Snek, Minswap, and Indigo pull back after the initial surge.
A key risk is a situation known as buy the rumor, sell the news. This is a situation where investors buy an asset ahead of a big event, and then sell when it happens. That happens as the market embraces the new normal.
A good example of this is Ethereum, whose price has crashed after the approval of spot ETH ETFs.
Cardano price analysis
The other reason why Cardano coins like Minswap, Indigo, and Snek may crash is ADA’s price action. Cardano’s price initially peaked at $1.175 after Trump revealed the strategic Cardano reserves. It then crashed to a low of $0.95 as the market embraced the new normal.
The most likely scenario is where the ADA price crashes to $0.789, the 50% Fibonacci Retracement level. This bearish view will become invalid if the Cardano price soars above this week’s high of $1.175. More Cardano gains will point to more gains, possibly to $1.32, a move that will boost other Cardano tokens.
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