Rapid Rise In Cardano’s TVL Points Toward Bullish Sentiment Around ADA

Cardano is one of the most prominent proof of stake (POS) blockchains that requires users to stake their native tokens, ADA, to confirm and secure transactions on the network. Over time, the network has held the record for the largest percentage of its token supply staked. And once again, the blockchain has solidified its position in this regard as it reaches a new high for the total amount of ADA staked in decentralized finance (DeFi) protocols. Cardano Token TVL Reaches New All-Time High Back in September 2021, Cardano saw the completion of the Alonzo hard fork upgrade, an update that brought smart contracts capability to the network. What this meant was that developers could now build decentralized applications (DApps) on the blockchain, finally bringing the decentralized finance (DeFi) sector to Cardano. Related Reading: Ethereum Eyes $2,000 As Crypto Market Shakes Off SEC Woes Since then, there has been a steady rise in the number of DeFi protocols being built on the blockchain. And as developers have flocked to the network, investors have followed suit, leading to a rapid rise in the number of staked ADA as users invested in various protocols. Although there were dips along the way, especially in the crypto winter of 2022, the tide has turned in 2023 and the number of staked ADA has now hit a new high. According to data from DeFiLlama, the total number of ADA staked on the network reached 560.7 million on Tuesday, July 4, a new all-time high. Total ADA staked in DeFi protocols reaches ATH | Source: DeFiLlama However, the new milestone is only reflected in the number of ADA staked and not in the total valued locked (TVL) in dollar terms. DeFiLlama shows that the current dollar equivalent of $161.82 million is still 50% below its March 2022 all-time high of $316.36 million. How Will ADA Price Respond? Like the altcoins in the crypto market, the price of ADA has responded closely to the movement of Bitcoin. As a result, over the last day, the digital asset has recorded a decline in its price. This is happening despite the latest TVL milestone. Related Reading: Shiba Inu Records Accelerated Burn Rate, But Price Fails To Respond This decline suggests that the price of ADA is not reacting positively to the new all-time high in Cardano TVL, meaning it remains isolated at this point. However, it could point to a bullish movement further out as the DeFi interest in the blockchain continues to grow. Currently, ADA is trading at a price of $0.28 which translates to a 3.30% decline in the last 24 hours. But on the 7-day chart, the altcoin is still seeing gains of around 5%. If the general market rallies again, then ADA is likely to retest the $0.3 resistance. ADA price struggles to hold $0.28 support | Source: ADAUSD on TradingView.com Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet… Featured image from iStock, chart from TradingView.com