According to data from DeFi Llama, the ADA-denominated value of cryptocurrency locked within the Cardano blockchain has reached an all-time high of 341 million ADA – indicating growing adoption of the platform.
ADA is the token that powers Cardano’s smart-contract-enabled high-performance blockchain that is seen as a rival to the Ethereum blockchain.
The ecosystem got a boost earlier this year upon the launch of the Djed over-collateralized algorithmic stablecoin, which has opened new yield farming possibilities in the Cardano DeFi ecosystem.
Djed’s circulating supply is already around 2.1 million, while the protocol has a reserve ratio of 471%, according to the project’s website.
USD-denominated TVL Still Way Below 2022 Highs
Despite the recent rise in the ADA-denominated value of Cardano’s TVL, a significant fall in the USD-denominated price of ADA in the last few weeks means that the USD-denominated TVL on the Cardano blockchain remains well below its early 2022 highs.
The highest TVL Cardano ever saw was over $430 million around 12 months ago.
Back then, Cardano’s price was closer to $3 per token. As of the time of writing, ADA/USD is changing hands just above $0.31, down around 90% from its all-time highs, and down 25% since finding strong resistance in the $0.42 area in early February.
The cryptocurrency’s aggressive drop in the last few weeks comes amid broader crypto market weakness as a result of strength in the US dollar, US yields and weakness in equities as traders price in a more hawkish Fed tightening outlook for the year.
Crypto-specific concerns are also hitting the market, like the recent downfall of crypto-friendly Silvergate Bank and ongoing jitters about a regulatory crackdown in the US.
Where Next for Cardano (ADA)?
Cardano’s drop this week means the cryptocurrency has fallen below all of its major moving averages. Moreover, the cryptocurrency now appears to be in a downtrend that goes all the way back to June 2022.
ADA/USD’s failure to break decisively above its 200-Day Moving Average last month is another sign that there wasn’t enough momentum for a significant positive shift in the near-term price outlook.
Technically speaking, the outlook for the cryptocurrency isn’t looking great in the near term, with a fallback under $0.30 looking highly likely. That would open the door to a drop back to late-2022 lows in the $0.24 area, a further 24% decline from current levels.
However, given that the 14-Day Relative Strength Index (RSI) is approaching oversold territory, it likely won’t be a straight line lower as it has been in the last few weeks.
Cardano (ADA) Alternatives to Consider
Cardano’s near-term outlook looks weak, with a significant risk of further near-term losses. Investors looking for better, shorter-term coins may want to diversify their holdings with some presale tokens that have a great risk-reward – indeed, whilst presales are risky (as all crypto is), crypto investors that have historically secured the best returns are those who got in early on a presale.
In the list below, we’ve reviewed the top 15 cryptocurrencies for 2023, as analyzed by the Cryptonews Industry Talk team.
The list is updated weekly with new altcoins and ICO projects.
Disclaimer: The Industry Talk section features insights by crypto industry players and is not a part of the editorial content of Cryptonews.com.
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