- Cardano’s upcoming layer-2 payment and instant settlement product, Hydra Pay, could have a significant impact on ADA price if well-received by the community.
- The recent increase in ADA transaction volumes suggests a potential price surge, indicating the underlying demand for Cardano’s utility.
Cardano’s Hydra Pay Raises Price Speculation
Cardano (ADA) developers have recently provided a glimpse into their new layer-2 payment and instant settlement product called Hydra Pay. This upcoming release has sparked speculation about its potential impact on the price of ADA. Historical on-chain data indicates that if the product is well-received by the community, ADA’s price could double.
Previous Success with Djed Algorithmic Stablecoin
Cardano made waves earlier in the year with the launch of the Djed algorithmic stablecoin on its testnet, which resulted in a 400% increase in whale transactions on the mainnet. In just three months, ADA’s price surged by 40%, reaching a peak of $0.46 on April 16. Considering this previous success, many are now curious about the potential impact of Hydra Pay on ADA’s price.
Transaction Volume Surge Indicates Growing Demand
Hydra Pay’s technical specifications reveal that transactions will be conducted using ADA tokens. If all goes as planned, this could lead to a significant increase in Cardano’s transaction volumes, potentially triggering a substantial price surge. Recent data shows a mild price surge in July as ADA transaction volumes experienced a marginal increase. On July 1, 7.32 billion ADA coins were transacted, growing by 7% to 7.85 billion ADA by July 9.
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Increased Staking Reduces Exchange Supply
Hydra Pay’s specifications also require users to stake funds in a smart contract before initiating transactions. If the product gains traction, the surge in ADA staking could inadvertently reduce the supply available on crypto exchanges. Currently, demand for ADA already exceeds exchange supply, with investors placing active orders to buy 65 million ADA while traders are only prepared to sell 56.4 million ADA at current prices. The resulting upward pressure from reduced supply could potentially catapult ADA’s price to a new 2023 peak.
Long-term Price Prediction: $0.50
While short-term price predictions remain neutral due to looming regulatory concerns and the SEC lawsuit, on-chain data reveals that nearly 81% of ADA holders are currently in a net-loss position, suggesting a reluctance to sell at a loss. This indicates that a surge in demand could trigger a price rally in the long run. If the bulls can break above $0.30, the next significant resistance at $0.35 could be surpassed, potentially leading to a new 2023 peak at $0.50. Conversely, if bearish sentiments prevail and ADA slips below $0.25, a support buy wall from investors may prevent further decline, but a drop to $0.25 cannot be ruled out.
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