Cardano (ADA) Price Hits $0.65 amid 185% TVL Growth —Here’s the Next Move

Insights:

• Cardano (ADA) price has entered a parabolic 35% breakout this week, rivaling Avalanche for the top-performing Layer 1 (L1) altcoin crown. 
• On-chain data trends show that the Cardano DeFi ecosystem has experienced a 185% TVL growth within the last 60 days.
• Having reclaimed the $0.60 territory, Cardano bulls now have sights set on erasing losses from the TerraUST crash back in May 2022. 

Cardano (ADA) price has entered a parabolic 35% breakout this week, as the bulls look to claim Avalanche’s crown as the top-performing Layer 1 (L1) altcoin. On-chain analysis identifies the major driving factor behind the ongoing ADA price rally, as well as the next key resistance levels ahead. 

Cardano DeFi Ecosystem Witnessed a 185% Growth in Total Value Locked (TVL) in 60 days

Cardano price entered a parabolic price breakout this week after spending the better part of Q3 2023 sandwiched within the narrow $0.25 – $0.30 range. This week’s 35% price bounce has seen ADA move from $0.48 to a 19-month peak of $0.65. 

In the process, Cardano has added $7 billion to its market cap, to rank second behind Avalanche (AVAX) as the top performing Layer-1 altcoin this week. 

Looking beyond the price charts, on-chain data trends have identified the rapid growth in Cardano’s DeFi ecosystem as a pivotal factor behind this rally. According to DeFillama, an on-chain data aggregator platform, the ADA price breakout this week, was preceded by a unusual spike in the Cardano DeFi ecosystem. 

As seen in the chart below, Cardano Total Value Locked (TVL) stood at $153.7 million, when the crypto market rally began in mid-October. However, in the eventful 60-days between October 15 and December 15, Cardano TVL has now ballooned 185% to hit 433.31 million. 

Total Value Locked (TVL) represents the nominal value of assets deposited in the various DeFi projects built and hosted on a blockchain. A growth in TVL is considered a strong bullish signal for the price of the native token. 

Mainly, an increasing TVL indicates a higher demand for the native token, as users lock up assets within the DeFi ecosystem, often requiring the platform’s native token for participation or governance.

In essence, this growth in Total Value Locked not only signifies confidence and adoption in Cardano DeFi but also acts as a catalyst for the bullish momentum surrounding the price. 

Unsurprisingly, the 185% TVL growth has coincided with a 160% price bounce between Oct 15 and Dec 15. Mathematically, bullish investors could argue that ADA price is still slightly undervalued, as the TVL growth is currently higher than the price uptrend. 

ADA Price Forecast: Next Stop $0.80 ? 

With Cardano TVL still trending upward this week, ADA price remains in prime position to enter another leg-up in the days ahead. However, historical buy/sell trends show that the bulls now face significant resistance at the $0.65 – $0.67 area. 

The In/Out of the Money Around Price (IOMAP) data, which groups the current ADA holders based on their entry prices, affirms this outlook.

It shows that 24,300 current holders had bought 859.16 million coins the last time ADA traded between $0.65 to $0.67. After over 1-year of holding at a loss, Cardano price could experience a pullback if those holders now look to take some profits.

But if the Cardano TVL keep rising, ADA price will likely garner enough momentum to smash that resistance and edge toward $0.80 as predicted.

On the downside, the bears could invalidate that positive prediction if ADA price below the critical psychological resistance at $0.50. But, in that case, the 57,280 holders that bought 820.51 million ADA at the average price of $0.61 could now offer initial support. 

Since the overall sentiment surrounding the broader crypto market still remains largely bullish, Cardano price will avoid this bearish scenario in the short-term.