How will the price of Cardano (ADA) change with the rise of DeFi and NFT?

Cardano Stablecoin Ecosystem Ardana Suddenly Halts Development

The Cardano (ADA) price action gave holders some breathing room as the price broke the bearish trend line.

Cardano’s price action has been rather dismal recently, with ADA trading at $0.3186 at press time, up just 0.74% on the day. But the price is down 89.81% from its September 2021 all-time high.

From a technical standpoint, the price of Cardano has been moving along a bearish trend line for over two weeks. Although at press time, price action began to break free.

One-Day ADAUSDT Chart | Source: Trading View

While the break of the ADA bearish trend line has given holders some short-term respite, it is crucial for price to settle above the $0.330 resistance level and then turn it into support.

Old ADA in motion

The recent short-term volatility in Cardano’s price seemed to bring some old coins back into circulation. The Age Consumed metric for ADA showed that after the price action turned bearish, a noticeable amount of old ADA was moved.

Cardano (ADA) consumption age |  Source: Sentiment
Consumable age ADA | Source: Sentiment

On November 24, over 38.58 billion ADA was moved on the network. The spikes on the Age Consumed chart signal a lot of movement of tokens after a long period of inactivity. This may indicate either a redistribution or some kind of sale.

However, the Net Realized Profit/Loss (NRPL) for ADA has largely projected losses for holders for much of the past six months. The metric calculates the net profit or loss for all coins spent during the considered time period.

NRPL and speed |  Source: Sentiment
Cardano NRPL and speed | Source: Sentiment

Low NRPL values ‚Äč‚Äčindicated capital outflow. However, a significant drop in the NRPL could lead to an upward reversal if the bulls are able to place prices above the $0.330 level. However, since the speed shows a constant increase, this means that the coin was used in transactions more often in a set period of time.

Cardano NFT and DeFi Space are still boring

Activity in the NFT space often contributes to the positive price momentum of the native blockchain token. A report published in late October suggests that Cardano is the third largest non-fungible token (NFT) protocol in terms of trading volume.

At that time, the price of ADA was rising. However, at the time of writing, the NFT landscape seems to have lost its luster.

Total NFT trading volumes (in USD) are now much lower than compared to June and July 2022. While NFT trading volumes remained above average, the number of unique addresses that bought more than $100,000 worth of NFTs was declining.

Cardano (ADA) NFT Metrics |  Source: Sentiment
Cardano NFT Metrics | Source: Sentiment

Recent ecosystem updates, such as Cardano’s launch of its algorithmic stablecoin Djed in January 2023, keep investors on the hook. However, the TVL of the coin continues to decline.

TVL |  Source: Defillama
Cardano TVL | Source: Defillama

Data from DefiLlama showed ADA TVL hovering around the $53.46 million mark. His TVL is down 83% from all-time highs.

However, mid-term on-chain performance for ADA shows slow price growth. In case of short-term bullish action, the price is above $0.33 and then $0.40 would be the key to a reversal. However, if the price of ADA falls further, Cardano could return to the lower $0.30 mark.

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Written by khirou

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