Why did Cardano(ADA) spike up by almost 50% in 3 days?
Cardano(ADA) spiked up starting from 28 May 2022 till today when its price went up from $0.46 to $0.67 as of 12 PM UTC on 31 May 2022.
On 28 May 2022, ADA was trading at just $0.46 per coin. Three days later on 31 May, it rose to $0.67 per coin, a jump of nearly 50%(45.65%). The jump in price is a result of a lot of factors from a relief rally to Lagon Bridge.
What is Cardano and ADA?
Cardano is a blockchain with its cryptocurrency coin ADA. It is a proof of stake blockchain and competes with Ethereum in many aspects. The blockchain has a speed of 250 Transactions per Second which is almost 20 times faster than the 10-15 TPS of Ethereum. Further, the native cryptocurrency ADA has a market cap of $28.3 Billion. Its price during the all-time high was $3.10.
Factors Behind Rising Price
1. Relief Rally
The largest factor behind the rising price of Cardano(ADA) was the relief rally. Cryptocurrencies plummeted heavily during the past 2 to 3 months. A relief rally occurs when there seems no further and imminent reason for selling. The prices rise because a lot of people find the asset(here cryptocurrency) much cheaper and hence attractive.
A much similar trend was seen in other cryptocurrencies as well.
2. Launch of Lagon Token Bridge
Lagon launched a Token Bridge connecting Ethereum to Cardano. A cross-chain bridge was launched by Lagon that has a contribution(though small) to the prices. Bridges help blockchain exchange value with each other through a process called Wrapping. However, blockchain bridges are often vulnerable to hacks such as the Ronin Bridge attack that resulted in a loss of over half a billion dollars.