Cardano's growth surpasses Bitcoin, DeFi sector shows strength

With support from the US and the Cardano community, ADA is moving toward its 2021 peak. Several indicators point to further growth.

In this article you will read:

• What developments are currently driving the ADA course

• Whether there is still room for further increase

• Which on-chain indicators point to a possible correction

Despite a brief foray outside the top-10, ADA investors have not been deterred this - so far moderate - altcoin year. ADA has now rebounded above the important $1 mark, reaching its highest level since April 2022. Several indicators suggest that price growth could continue in the coming weeks.

ADA in the US

ADA's recent comeback is largely due to the increasing involvement of Cardano stakeholders in the US. Here, with Trump's possible re-election, a pro-crypto administration is expected. Cardano founder Charles Hoskinson could even play a role as an adviser on crypto regulation, according to earlier statements. In addition, investors are speculating about a possible collaboration between Cardano and SpaceX, following Hoskinson's visit to the tech company. Although Hoskinson has not confirmed anything concrete on this, ADA's trajectory to the moon may involve more than a metaphor.

In addition, ADA could soon debut on Wall Street. Asset manager Bitwise recently filed an application for a crypto index ETF with the SEC, in which ADA will have a weight of 0.7 percent. This offers institutional investors a diversified entry point into crypto, likely leading to increased capital flows toward ADA.

Revival of the DeFi sector

The recent share price surge is mostly due to Cardano's iconic founder, more than the organic growth of the ecosystem. Still, renewed interest in ADA from the U.S. is acting as a catalyst for improved blockchain stats.

Cardano's DeFi sector is showing the strongest Total Value Locked (TVL) growth among the top 20 networks, up 176 percent in one month. This is partly due to ADA's share price increase, but also results in a new TVL record. Moreover, the rising volume of stablecoins on the Cardano blockchain indicates continued capital inflows.

Relative strength

Cardano's rise goes hand in hand with a resurgence of "old altcoins." New listings at brokers are adding momentum as private investors reactivate their portfolios from the 2021 bull market. This gives ADA a short-term advantage over other cryptocurrencies, including Bitcoin.

According to analysts at Alphractal, ADA is showing relative strength against Bitcoin. Indexes of the Cardano ecosystem are showing more growth than the leading cryptocurrency in recent days. Bitcoin's declining market dominance seems to favor ADA.

Is a new all-time high within reach?

For many 2021 private investors, the question now is whether ADA can approach its old record of nearly $3. Analysts, however, warn against too much optimism.

An increased wave of confidence among traders, according to Alphractal, leads to "aggressive long positions on ADA". Liquidity levels below the current price suggest that a pullback could trigger a liquidation wave. Still, there are indications of further rise, with a key liquidity point at 1.20 euros that could potentially provide support.

The analyst firm DYOR is more optimistic. According to their "Fair Price Model," ADA's fair value is currently at 1.70 euros. Whether new investors hold their nerve and hold on to their increased ADA positions will be seen in the coming weeks.