Will Cardano Outperform Ethereum in 2025?

Cardano’s (ADA) valuation relative to its top layer-one blockchain rival, Ethereum (ETH), surged by nearly 350% after bottoming out in June 2024 at around 0.0001062.

The sharp rebound in ADA/ETH pairs coincided with the launch of Spot Ethereum ETFs in the US, suggesting that traders decided to “sell the news” to seek opportunities in underbought assets.

That explains why Ethereum’s crypto market dominance has declined by over 50% since the ETF launch.

However, could the uptrend in ADA/ETH pairs continue further in 2025, leading to Cardano’s better US dollar returns than Ethereum? Let’s discuss.

Technical Outlook: ADA/ETH May Drop 30% Next

The ADA/ETH trading pair shows signs of exhaustion after testing a multi-year horizontal resistance trendline that has historically preceded significant price declines.

The chart below shows that the pair has already begun to retrace, dropping nearly 29.20% in the latest two-week candle.

The pullback coincides with the Relative Strength Index (RSI) slipping from overbought territory. The RSI peaked near 80 earlier this month but has since dropped to around 61, signaling the start of a potential overbought correction.

The setup mirrors past cycle tops where similar RSI levels aligned with sharp drawdowns, namely a circa 78.50 downtrend in 2022-2024 and over 65% decline in 2020.

If history repeats, ADA/ETH could initially decline toward its 50-period exponential moving average (EMA) on the 2-week chart, currently near 0.0002363, down about 30% from the current levels.

However, should the selloff deepen beyond the 50-EMA, the next major downside target for 2020 lies near the descending trendline support — a level that has underpinned the pair’s broader downtrend since 2018.

As a result of this technical perspective, Cardano will likely underperform Ethereum in 2025 unless ADA/ETH breaks above the horizontal trendline resistance.

Cardano TVL is Declining Despite Bullish Claims

Ethereum appears to be regaining its dominance in decentralized finance (DeFi) as on-chain data for 2025 reveals a clear divergence in network performance compared to Cardano.

The surge comes as the U.S. government, under the Donald Trump administration, takes a more crypto-friendly stance, encouraging capital inflows into blockchain ecosystems—particularly stablecoins.

According to DeFiLlama, Ethereum’s total value locked (TVL) has rebounded sharply, surpassing 25 million ETH, a level not seen since early 2022. This upward momentum reflects renewed activity across Ethereum-based DeFi protocols, driven by stronger liquidity, institutional interest, and regulatory clarity.

Alongside this, Ethereum’s cumulative stablecoin deposits have soared past 120 billion ETH units, marking a significant vote of confidence in its infrastructure as the primary settlement layer for crypto finance.

By contrast, Cardano is showing signs of recovery but at a slower pace. The network’s TVL, measured in ADA, remains below 500 million despite recent growth.

Meanwhile, Cardano’s stablecoin activity has increased modestly, with cumulative deposits approaching 30 million ADA.

While this marks progress from the lows of mid-2024, it still pales compared to Ethereum’s scale and speed of adoption. The relative volatility in Cardano’s TVL also suggests less consistent user engagement and lower capital stickiness.

Overall:

• Ethereum holds a stronger on-chain position than Cardano going into the rest of 2025.
• Regulatory support has improved market sentiment, and Ethereum benefits from its established DeFi ecosystem and large liquidity base.
• Cardano has made technical progress but still struggles to attract meaningful stablecoin inflows and consistent protocol usage.
• Stablecoins are now a core part of the crypto economy. Ethereum commands the majority of this liquidity, reinforcing its bullish momentum.
• Unless Cardano rapidly grows its stablecoin and DeFi activity, Ethereum will likely remain the top performer in on-chain metrics for the remainder of 2025.