Rapid increase in TVL of Cardano points to bullish sentiment around ADA

Cardano is one of the most prominent proof-of-stake (PoS) blockchains, which requires users to stake their native token, ADA, to confirm and secure transactions on the network. Over time, the network has held records for the largest percentage of its token supply. And once again, blockchain has solidified its position in this regard as it has reached a new high for the total amount of ADA at stake in decentralized finance (DeFi) protocols.

Cardano token TVL reaches new all-time high

In September 2021, Cardano saw ending Alonzo hard fork upgrade, an update that brings smart contract capability to the network. This meant that developers could now build decentralized applications (DApps) on the blockchain, ultimately bringing the decentralized finance (DeFi) sector to Cardano.

Since then, there has been a steady increase in the number of DeFi protocols being built on the blockchain. And as developers flocked to the network, investors followed suit, leading to a rapid increase in the number of ADA at stake as users invested in various protocols.

Although there were dips along the way, especially in the crypto winter of 2022, things have changed in 2023 and the number of ADA at stake has now reached a new high. According to data from DeFiLlama, the total number of ADA held 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 Total Valuable Locked (TVL) in dollar terms. DeFiLlama shows That $161.82 million in current dollar equivalent is still down 50% from its March 2022 all-time high of $316.36 million.

How will the ADA price react?

Like altcoins in the crypto market, the price of ADA has reacted closely to the movement of bitcoin. As a result, the price of the digital asset has registered a decline over the past day. This is happening despite the latest TVL milestones.

This decline shows that ADA price is not reacting positively to the new all-time high in Cardano TVL, which means it remains isolated at this point. However, this could point to further bullish momentum as DeFi interest in blockchain continues to grow.

Currently, ADA is trading at a price of $0.28, which means a decline of 3.30% in the last 24 hours. But on the 7-day chart, the altcoin still sees gains of around 5%. If the general market turns bullish again, ADA is likely to retest the resistance level of $0.3.

ADA price struggles to hold $0.28 support | Source: ADAUSD on TradingView.com