ADA Price To Rise With Cardano Stablecoin Unveiling?

Key points:

• Cardano’s stablecoin, Djed, will launch on the mainnet in the first month of 2023.
• This type of stablecoin an "algorithmic", meaning that the stability of the asset is guaranteed by some very advanced mathematics. 
• Investors and traders may be hoarding ADA in preparation for a price surge.
• With bearish sentiment evident on the daily and shorter timeframes, this price surge could signal further declines.
• However, the community is optimistic rather than pessimistic about the announcement.

You can call it a Djed, but the game is a stablecoin. Cardano’s stablecoin, Djed, will reportedly launch on the Cardano mainnet in the first month of 2023.

They call this type of stablecoin an "algorithmic", meaning that the stability of the asset is guaranteed by some very advanced but (they say) "extremely important" mathematics.

Cardano has partnered with COTI on this massive project.

Combined with Djed’s statement, let’s briefly review ADA’s recent performance:

• Recent price activity points to more pain
• Bears will grow stronger if Crunchzone scales above $0.3160
• This bodes wonderful things for Cardano

Stablecoins can be an excellent entry point for newbies into the ever-expanding Cardano ecosystem. When will the ADA respond to this?

It's official! $Djed will launch on the Cardano Mainnet in January 2023! 🚀$Coti $Ada #Djed pic.twitter.com/cu8ryW6Lo7

— Djed Stablecoin (@DjedStablecoin) November 21, 2022

Adjusted optimism

According to CoinGecko, the price of ADA surged 4.7% following the news. Likewise, TVL rose from $64.9 million yesterday to $68.52 million today.

Investors and traders may be hoarding ADA in preparation for a price surge.

 Image: TradingView

However, with the release of stablecoins, not everything is sunshine and rainbows. This can be summed up in responses to commenters on the announcement's Twitter thread:

How is this different from luna’s UST

— Moche (@mocheswap) November 21, 2022

This is reflected in the price volatility of ADA. Backsliding bias suggests that owners will suffer extra pain. At the current price of $0.3160, a drop to $0.2985 is possible.

However, the money flow index appeared to contradict a reading of 60, suggesting a possible reversal.

This correlation also contradicts the regression pattern, as the significant correlation (0.94) between ADA and BTC gains is undoubtedly beneficial.

Still bearish, no doubt

However, the RSI reading remains neutral. However, a break below $0.2985 is still possible as the price action forms a double bottom.

The impending Bollinger Band tightening zone will also threaten another bullish recovery.

The announcement was warmly welcomed and anticipated by the community. However, the past experience of the crypto space and the current bear market poses a huge hurdle for investors and traders.

With bearish sentiment evident on the daily and shorter timeframes, this price surge could signal further declines. However, this shows that the community is optimistic rather than pessimistic about the announcement.

ADA total market cap at $10.8 billion on the daily chart | Featured image from CoinCu News, Chart: TradingView.com