- Cardano’s (ADA) price has rallied 36% since dropping to $0.83 on December 30, 2024, buoyed by Bitcoin’s recovery above $10,000
- Activity within Cardano’s DeFi ecosystem has surged, with the total value locked (TVL) rising from $42.3 million to $57.9 million in seven days, a 36.8% weekly increase
- ADA’s price chart has formed a V-shaped recovery pattern, suggesting the potential for further gains, with some analysts predicting a cycle top of $1.5
The surge in Cardano’s (ADA) price has left many investors curious about what’s behind the upswing. One explanation lies in the increased activity within Cardano’s DeFi ecosystem and the steady rise in Total Value Locked (TVL), both contributing to ADA’s rally.
The Current Performance of Cardano
Cardano ADA, currently trading at $1.01, has seen a significant recovery, rising by 36% since it dropped to $0.83 on December 30, 2024. As of now, ADA’s price is trading at $1.30, reflecting a 5% increase over the last 24 hours. This swift rebound has led to a bullish position above its 50-day simple moving average, possibly igniting the next upward trend.
The Impact of Bitcoin and Ethereum
The bullish sentiment is not exclusive to Cardano. The entire crypto market has also seen a recovery, driven by Bitcoin’s breakthrough above the $10,000 mark. Bitcoin, the largest cryptocurrency by market capitalization, has jumped 8% over the last week, reaching a new three-week high of about $102,760 on January 7. Ethereum has also seen a rise, trading above $3660 after a 0.5% increase over the last 24 hours.
Positive Sentiment and Regulatory Environment
The upbeat performance in the cryptocurrency market could be influenced by broader economic factors and political events. With the upcoming inauguration of Donald Trump on January 20, optimism is mounting that this could result in a friendlier regulatory environment for cryptocurrencies, including ADA.
Cardano’s Total Value Locked (TVL) Increases
The Cardano Network’s DeFi protocols have seen a significant increase since December 31, improving investor trust. Data from DefiLlama indicates that ADA’s total locked value (TVL) rose from $423 million to $579 million in seven days, marking a 36.8% weekly gain.
A V-shaped Recovery for ADA
ADA’s price action has nurtured a V-shaped recovery chart pattern on the daily chart since December 2. Currently, ADA trades above a crucial demand zone between $1.00 and $1.12, where the 50-day simple moving average (SMA) is currently sitting. Increased buying from the current levels could lead to a price rise above the $1.23 neckline to complete the V-shaped pattern.
Conclusion
While some analysts are optimistic about ADA’s price recovery, with targets as high as $1.5 for this cycle, others provide a more conservative prediction, suggesting that the ADA/USD pair could top at $5 this cycle. As always, every investment and trading move involves risk, and investors should conduct their own research when making a decision.
