Cardano’s TVL Surges to Year High: Is ADA Ready for $0.4?

• The native token of the Cardano ecosystem fell by 14.67% despite the rise in TVL.
• Analysis of the 4-hour timeframe displayed the increasing supremacy of bears from the $0.38 region.
• ADA’s next target could be below the $0.30 threshold unless buying pressure appears.

Cardano’s ADA recently witnessed a significant surge in Total Value Locked (TVL), reaching its highest level in the year. TVL is a measure of the total worth of smart contract deposits in a Decentralized Finance (DeFi) protocol.

According to DefiLlama, Cardano’s TVL reached $159.3 million. Further information from the multi-chain blockchain dashboard showed that lending protocols, like Aada, and DEXs, including Minswap, played vital roles on the road to the milestone.

While Minswap contributed a 10.34% hike in the last 30 days, Aada added another 75% increase within the same period. This sharp increase in TVL indicates growing adoption and utilization of the Cardano ecosystem.

While the surge in TVL usually does not guarantee a notable price movement for ADA, there have been some occasions when the metric has fueled further momentum for the token.

However, over the past seven days, ADA’s price had lost 14.67% of its value. Based on the 4-hour chart, the token has been overwhelmed by increased selling pressure since the bullish structure break on May 4. This dumped the price to $0.357 on the following day.

This Could be ADA’s Next Destination

While there was an effort to push the price, ADA appearing in the list of tokens prescribed by the SEC did not help. Therefore, this provided another bearish rationale to keep up control as ADA fell as low as $0.319.

A further assessment of the 4-hour timeframe showed that the Relative Strength Index (RSI) was 22.34. This value implies that ADA’s momentum was largely oversold.

Consequently, if ADA fails to get a strong presence of solid accumulation or buyers’ presence, the price could go further southwards. Therefore, the next target levels to watch out for may be below $0.30.

Despite ADA’s bearish condition, Cardano did allow the overall sentiment to halt its developmental progress. On May 8, its development arm, Input Output, put out a tweet focusing on collaboration and innovating with the ecosystem.

Prior to that, the firm also responded to the SEC’s claims. In its reply, Input Output noted that the allegations were inaccurate. “The filing contains numerous factual inaccuracies and will not impact IOG’s operations in any way. Under no circumstances is ADA a security under U.S. securities laws,” IOG mentioned in the statement.

Nevertheless, ADA holders might need to cope with the declining price. However, this could also offer traders an opportunity to open short contracts, provided the momentum remains the same.

Disclaimer: The views, opinions, and information shared in this price prediction are published in good faith. Readers must do their research and due diligence. Any action taken by the reader is strictly at their own risk. Coin Edition and its affiliates will not be liable for direct or indirect damage or loss.