Why is Cardano (ADA) price up today?

Cardano (ADA) continued its recovery on Feb. 20, up 4.4% over the last 24 hours to trade above $0.79.

ADA’s bullishness over the last two days has seen it bounce 9% from its $0.73 low on Feb. 18 to today’s intraday high of $0.79. The rebound has seen ADA recoup nearly all the losses made on Feb. 18, citing a possible shift in investor sentiment toward the layer-1 token.

There are several factors driving the ADA price up today, including:

• The ratification of Cardano’s constitution

• Network growth and an increase in TVL backs ADA’s upside.

• ADA’s classic technical pattern projects a rally above $3.50.

Ratification of the Cardano constitution boosts ADA price

The rally in ADA price comes after Cardano’s Constitution was ratified to empower ADA holders with decision-making power and enhance network transparency.

Key takeaways:

• In a live YouTube broadcast on Feb. 19, Cardano founder Charles Hoskinson announced that the Cardano Constitution had been officially ratified.

• The new constitution replaces its interim version that was introduced in June 2024.

• It establishes a structured governance framework that ensures all ADA holders play a direct role in shaping Cardano’s future.

• The decision follows a successful community vote, with an 85% approval, surpassing the required 75% threshold. 

• Commenting on the new development, the Cardano Foundation said:

“This milestone sets the foundation for onchain governance, ensuring clear rules, transparency, and accountability in decision-making.”

• The new Constitution is set to be fully enacted on Feb. 23, marking a major step forward in decentralizing decision-making and promoting community-driven development.

• Describing Cardano’s governance evolution, Hoskinson said:

“That means Cardano is basically a government, a living thing.”

This move is seen as a significant step toward a self-sustaining ecosystem, potentially boosting investor confidence. A clear, community-driven governance model could attract more participants and developers, increasing demand for ADA and driving its price upward.​​

Cardano TVL recovers by 22%

DeFi protocols on the Cardano Network have also significantly increased since Feb. 8, improving investor trust. 

• Cardano’s total locked value (TVL) rose from $313.6 million to $383.7 million in eight days, marking 22.4% weekly gains, as indicated by data from DefiLlama.

• The rise in TVL was led by Splash Protocol (market maker), lenFi (Lending), and Indigo (lending), which registered increases of 125%, 5% and 29% in locked value, respectively, over the past seven days.

• Cardano has also witnessed a considerable increase in onchain activity, evidenced by an increase in daily transactions since Feb. 8,, as per data from Artemis.

• Cardano’s open interest (OI) has also increased by 17% over the same period, reaching $710 million on Feb. 20, inferring a continued interest from futures traders.

Related: 2020-era Cardano chart fractal forecasts $3 ADA price in 2025

ADA price nurtures a V-shaped recovery

ADA’s price action has been nurturing a V-shaped recovery chart pattern on the daily chart since Jan. 17, as shown below.

• A V-shaped recovery is a bullish pattern formed when an asset experiences a sharp price increase after a steep decline. 

• It is completed when the price moves up to the resistance at the top of the V formation, also known as the neckline.

• ADA appears to be on a similar trajectory and now trades below a supply-demand zone between $0.90 and $0.98, where the 50-day and 100-day simple moving averages (SMAs) appear to converge.

• This suggests that bulls need to push ADA above this level in order to increase the chances of the price rising to the neckline at $1.167 to complete the V-shaped pattern.

• Higher than that, the next logical move would be the multi-year $1.33 range high reached on Dec. 3, 2024.

• This would represent a 48% uptick from the current price.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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