Cardano Continues To Rise As TVL Reached Record High Over $300 Million
As TVL reached new record high, the price of ADA strives upward. More upside expected.
Key Takeaways
- Cardano is up by 118% since October 20.
- TVL reaches a new all-time high.
- More price increases are expected in the short term.
The total value locked (TVL) in Cardano‘s decentralized finance (DeFi) ecosystem surpassed a 21-month peak, reaching nearly $338 million, last seen in March 2020. Meanwhile, the ADA token continues to rise and has increased 40% since the start of the month.
Did one impact the other or vice versa, and can the ADA token continue to rise further as it made a major breakout?
TVL At a New All-Time High
According to DeFillama, Cardano‘s TVL reached $338 million, marking a significant 520% growth since the beginning of the year when it was below $50 million.
TVL is an important metric in DeFi, indicating the total value of assets locked in a DeFi protocol or ecosystem. It reflects the health and trust in a DeFi ecosystem, with rising TVL suggesting greater investor confidence.
Cardano’s DeFi scene is experiencing a resurgence, with DeFillama data showing a notable increase in decentralized exchange (DEX) activities. The 24-hour trading volume on Cardano DEXs exceeded $12 million, and the weekly volume showed a 140% increase to $50 million.
This marks a turnaround from September when the network’s DEXs processed less than $50 million in transactions. If this trend continues, Cardano might surpass a monthly trading volume of $100 million for the first time since August.
ADA Price Analysis
After finding resistance in mid-November at a significant horizontal area of $0.40, the price of ADA consolidated until December 1. It ended its sideways move at $0.37 and was ready for a downturn, but instead, it continued moving up with stronger momentum, breaking the resistance point.
As we can see from the daily chart above, this is the upper bound of the larger range, which it has been since November last year. Its breakout is a definitive signal of a starting bull phase for ADA.
The wave structure displays a five-wave pattern out of which the last advancement from December is its wave 5. It has more room to go before completion, with the next likely target being at $0.70 – the territory of the next resistance in line to the upside.
After completing this uptrend, the price of ADA should start moving to its first bull market correction and retest some of the broken resistance points for support. It would establish the first higher low and prove a higher plateau has been achieved.
There aren’t any signs of encountered resistance, so this assumption comes from the wave structure and the daily chart RSI entering the overbought zone, currently sitting at 80%. In the short-term, more upside potential is present, but as the price starts to get overextended, a referred downturn could follow later in December.
Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
