Cardano soars! Is $2 next?

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Cardano’s ADA surges past $1 amid broader crypto market stagnation

Key points:

• ADA rallied 12% over the past 24 hours, outperforming major cryptocurrencies like BTC and ETH, to hit a three-week high above $1.

• Technical indicators suggest potential further gains of up to 30%, with the MACD showing bullish momentum and the RSI validating upward movement.

News - Cardano’s native cryptocurrency, ADA, surged 12% in the last 24 hours, leading gains among major digital assets. The rally took ADA above the $1 mark for the first time in three weeks, outperforming a rangebound Bitcoin (BTC) and other top tokens like Ethereum (ETH) and Solana (SOL), which posted modest gains of less than 2%.

Bitcoin continues to trade within a narrow range, with analysts forecasting limited movement until February 2025, when broader market catalysts like the inauguration of President-elect Donald Trump could spur momentum.

What’s driving ADA’s rally? - ADA’s price surge comes without any immediate catalyst but aligns with broader optimism surrounding the Cardano ecosystem. The platform is poised for several upcoming fundamental developments, including:

• Bitcoin-centric decentralized finance (DeFi): Efforts to integrate BTC-focused financial tools into Cardano’s ecosystem.

• Scalability improvements: Enhancements to network performance and interoperability with other blockchains.

The protocol’s roadmap and technical upgrades are fueling speculative interest and price action.

What’s next for ADA? - Technical analysis suggests ADA could see additional gains in the near term:

• MACD signals bullish momentum: A renewed bullish crossover in the MACD suggests rising momentum, with ADA positioned for a potential retest of its December 3 high of $1.32.

• RSI points to further upside: The 14-day RSI is breaking through a descending trendline, indicating continued upward price action.

ADA’s breakout from its four-week downtrend reinforces the bullish outlook, setting the stage for gains of up to 30% in the coming weeks. As traders watch for further developments in the Cardano ecosystem, ADA’s strong performance could signal increased investor confidence in the protocol's long-term potential.

Ether’s leverage ratio hits record high, doubling Bitcoin’s amid risk-taking surge

Key points:

• Ethereum’s leverage ratio has reached a record 0.57, over double Bitcoin’s 0.269, signaling heightened market speculation.

• High leverage levels indicate increased risk-taking, potentially amplifying ETH’s price volatility compared to BTC.

News - Ethereum’s ether (ETH) has emerged as the preferred asset for traders leveraging high-risk positions, as its leverage ratio hit a record high of 0.57. This marks a sharp increase from 0.37 recorded at the beginning of Q4 2024, according to data from CryptoQuant.

The leverage ratio, calculated as the cumulative open interest in futures contracts divided by the total ETH in exchange wallets, reflects the extent to which traders are employing leverage. A rising ratio suggests growing speculation and risk appetite in the market.

Leverage dynamics explained - Leverage allows traders to control large market positions with a smaller capital deposit, amplifying both profits and losses. For instance, with a 10:1 leverage, a $1,000 deposit can control a $10,000 position. However, this also increases the likelihood of liquidations if the market moves against the leveraged position, leading to heightened volatility.

ETH’s leverage ratio of over 0.5 highlights significant speculative trading activity compared to the actual coins available in exchange wallets. In contrast, Bitcoin’s leverage ratio, while at its highest since early 2023 at 0.269, remains well below Ether’s.

What’s next? - The disparity in leverage ratios suggests ETH is likely to experience greater price volatility than Bitcoin in the near term. Traders should be cautious, as the elevated use of leverage magnifies the risks of liquidations, which could lead to sharp price swings.

Analysts advise closely monitoring ETH futures markets, as sustained high leverage levels could signal either continued bullish sentiment or increased vulnerability to sudden corrections.

BlackRock’s Bitcoin ETF suffers record $332M outflow as new year begins

Key points:

• BlackRock’s IBIT recorded $332 million in outflows, the largest in its history, surpassing the $188 million record set in late December.

• Other ETFs like Bitwise’s BITB and Fidelity’s FBTC saw inflows of $48 million and $36 million, respectively, highlighting varied investor sentiment.

News - BlackRock’s Bitcoin ETF, IBIT, started 2025 on a challenging note, witnessing record-breaking outflows. The fund, which manages over $53 billion in net assets, saw $332 million withdrawn, according to data from SoSoValue. This outflow is the largest since IBIT’s inception, eclipsing the previous record of $188 million set in late December.

This marks a continuation of outflows from IBIT that began on December 20, with daily withdrawals ranging from $17 million to Thursday’s massive tally. Despite Bitcoin’s resilience in recent weeks, the withdrawals indicate shifts in investor behavior as they rebalance portfolios or secure profits.

Mixed sentiment across ETFs - While IBIT experienced outflows, other ETFs in the sector observed positive momentum. Bitwise’s BITB ETF attracted $48 million, while Fidelity’s FBTC saw inflows of $36 million. In contrast, Grayscale’s GBTC followed IBIT’s trend, logging $23 million in outflows.

What’s next? - The surge in IBIT outflows could signify short-term profit-taking or cautious repositioning rather than a complete loss of faith in the fund or the broader Bitcoin market. Analysts will be watching closely for signs of stabilization, particularly as Bitcoin hovers near the $97,000 mark, up 1.5% in the past 24 hours.

If BlackRock’s ETF sees continued withdrawals, it may impact broader sentiment in the ETF sector. However, inflows into competing ETFs suggest that investor confidence in Bitcoin-related products remains robust, with diversification playing a key role.

VIRTUAL hits $5 Billion market cap before profit-taking sparks 15% dip

Key points:

• VIRTUAL surged to an all-time high of $5.05 and a $5 billion market cap on January 2 before retreating by 15.2% within 24 hours.

• Profit-taking of over $28 million contributed to the decline, with indicators suggesting potential further drops to $3.85.

News: VIRTUAL’s rapid surge and decline - Virtuals Protocol (VIRTUAL), a leader in the AI agents niche, experienced a rapid rise in price and market cap, hitting a record $5.05 per token and exceeding the $5 billion market cap on January 2, 2024. However, profit-taking and market momentum led to a swift 15.2% correction, pushing the market cap back to $4.28 billion.

The retracement followed VIRTUAL's dramatic price climb from $3.87 billion market cap just a day prior, driven by heightened investor interest. With all tokens in circulation, price fluctuations directly impacted the market cap, which remains at risk of further decline.

Profit-taking and market behavior - On-chain data from Santiment highlighted realized profits of over $28 million on January 2, contributing to the decline. This surge in profit volume coincided with VIRTUAL’s peak, suggesting that holders capitalized on the price surge, exacerbating selling pressure.

Price prediction: Key levels to watch - Technical indicators point to a potential continued decline for VIRTUAL. The Relative Strength Index (RSI) reached an overbought level of 79.87 on January 2, signaling the likelihood of a pullback. The Supertrend indicator flagged overhead resistance at $5.15, which the token must break to regain upward momentum.

• Bearish scenario: Failure to surpass $5.15 could see VIRTUAL drop to $3.85, extending the current correction.

• Bullish scenario: A successful breach of the $5.15 resistance could push VIRTUAL's price closer to $7, potentially increasing its market cap to $6 billion.

With these dynamics in play, VIRTUAL faces critical levels that could define its trajectory in the near term.

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Crypto scams uncovered

• Centra Tech raised $25 million through a fraudulent ICO in 2017, promising a cryptocurrency debit card. The founders, Raymond Trapani and Sohrab Sharma, were arrested in 2018 after it was revealed they fabricated partnerships with Visa and Mastercard, leading to charges of fraud and conspiracy.

• WoToken promised high returns as a cryptocurrency wallet but was exposed as a Ponzi scheme in 2018, stealing over $1 billion. The founders, part of a criminal group, were arrested, but many investors lost their funds.

• CloudToken claimed high returns through blockchain technology but was revealed as a fraud, defrauding investors of hundreds of millions. The scheme collapsed in 2019, and its leaders vanished, leaving the platform shut down.

Top 3 coins of the day

Cardano (ADA)

Key points:

• At press time, ADA was trading at $1.09, reflecting a 14.21% increase over the last 24 hours.

• It was one of the top gainers, showing significant bullish momentum according to CoinMarketCap.

What you should know:

ADA surged significantly over the last 24 hours, registering a 14.21% gain, making it one of the top-performing cryptocurrencies. On the daily chart, the Parabolic SAR indicated a robust bullish trend as the dotted markers trailed below the price action. The Awesome Oscillator displayed a shift toward positive momentum, highlighted by a sequence of green bars. Volume also spiked notably, reinforcing the ongoing bullish sentiment. Immediate resistance is expected at $1.12, with support levels holding steady near $1.00. Sustained buying pressure may drive ADA toward higher resistance levels, while a lack of follow-through could lead to consolidation or minor corrections.

Bitcoin (BTC)

Key points:

• At press time, BTC was trading at $96,261, reflecting a 0.58% decrease over the last 24 hours.

• It was the top trending cryptocurrency according to CoinMarketCap's data.

What you should know:

Bitcoin experienced a minor decline, consolidating around the $96,000 mark after reaching an intraday high of $97,061.57. The SMA 9 line indicated that the short-term trend favored bearish momentum, with the price trading below the moving average. The RSI hovered at 50.16, suggesting neutral sentiment with no clear indication of being overbought or oversold. Trading volume remained moderate, reflecting balanced activity without significant moves. Key support was noted at $95,000, while resistance stood at $97,500. A strong push above resistance could signal bullish momentum, whereas a break below support may confirm further weakness.

Pudgy Penguins (PENGU)

Key points:

• At press time, PENGU was trading at $0.0344, reflecting a 2.19% decrease over the last 24 hours.

• It was one of the biggest losers according to CoinMarketCap.

What you should know:

PENGU has been facing bearish pressure, evident from its 2.19% decline over the last day. On the 2-hour timeframe, the price dropped below the SMA 9, indicating a potential short-term downtrend. The Chaikin Money Flow (CMF) displayed a negative reading of -0.16, suggesting that capital outflows have been dominating inflows. Trading volume remained moderate, with no significant buying activity to reverse the bearish trend. The overall sentiment appears bearish, with immediate support observed at $0.0330, while resistance lies at $0.0362. A break below the support could trigger further selling pressure, whereas a recovery above resistance might hint at stabilization.