Cardano Market Analysis: ADA/USD rushes to the north as Shelly update looms

The price of Cardano (ADA) has been on fire. The price increased from $0.0485 on May 21 to $0.0889 by press time. Moreover, the coin tested $0.0900 during early Asian hours, which is the highest level since June 28, 2019. ADA/USD has gained over 40% in the recent week and 170% since the start of the year. Now it is the tenth-largest digital asset with the current market value of $2.29 billion. 

The coin started to rally at the end of May after Charles Hoskinson, the CEO of IOHK, announced that the protocol update known as Shelley will be deployed between June 30 and July 7. IOHK is a developer company behind Cardano blockchain that has been working on Shelley for the past two years.

The Shelley update will bring a lot of improvements and new features. Namely, it will allow users to control block validations and unlock staking rewards for ADA holders. It means that they will be able to earn interest on their crypto stashes.

ADA/USD: Technical picture

On the long-term charts, ADA/USD may face stiff resistance at $0.0900, followed by 138.2% Fibo projection for the downside move from February 2020 high at $0.0923. This area was rejected during early Asian hours, but the bulls may make another attempt to clear it as the overall sentiment on the market remains bullish. Once it is out of the way, the upside is likely to gain traction with the next focus on $0.1000. Considering the upside-looking RSI on the weekly chart, the bullish scenario looks likely, however, the coin is obviously overbought, which may lead to a short-term correction.

ADA/USD weekly chart

On the intraday charts, the initial support for the coin is created by 1-hour SMA50 and SMA100 on approach to $0.0800. A sustainable move below this area will open up the way to $0.0725 (the recent low reached on June 2 and 1-hour SMA200). If it is broken, the sell-off may gather pace with the next aim at $0.0600.

ADA/USD 1-hour chart