How will Cardano (ADA) fare with DeFi, NFT growth?

by James · November 24, 2022

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

The Cardano price has been pretty dull lately, with ADA trading at $0.3186 at press time, up just 0.74% on the day. But the price is down a full 89.81% from the record in September 2021.

From a technical point of view, the Cardano price had been moving in a bearish trend line for over two weeks. Although at press time the price action was beginning to unwind.

Cardano ADA/USDT One Day Chart | Source: TradingView — ADAUSDT One-Day Chart | Source: TradingView

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

Table of Contents

Elderly ADA on the go

The recent short-term volatility in the Cardano price seemed to put some old coins back into circulation. The Age Consumed calculation for ADA highlighted that after the price action turned bearish, a significant amount of aged ADA was moved.

Cardano (ADA) Age Consumed | Source: Sentiment — ADA Age Consumed | Source: Sentiment

On November 24, over 38.58 billion ADA were moved on the chain. Spikes in the Age Consumed graph signal that a large number of tokens are moving after being inactive for an extended period of time. This can either point to redistribution or some form of sale.

That said, the net realized profit/loss (NRPL) for ADA was largely projected loss for holders for most of the past six months. The calculation calculates the net profit or loss for all coins used over the time frame considered.

NRPL and Speed | Source: Sentiment — Cardano NRPL and Velocity | Source: Sentiment

Low NRPL values indicated capital outflow. However, a significant drop in NRPL could lead to an upside reversal if bulls can place prices above the $0.330 level. That said, with velocity showing a consistent increase, it means that the coin was used in transactions more frequently in the specified time frame.

Cardano NFT and DeFi Space Still Dull

Activity in the NFT space often helps positive price momentum for the blockchain’s native token. A report in late October suggested that Cardano was the third largest non-fungible token (NFT) protocol by trading volume.

During that time, the ADA award was appreciated. At the time of writing, however, the NFT landscape appears to have lost its luster.

Total NFT trade volumes (USD) are much smaller now than compared to June and July 2022. While NFT trade volumes remained above average, the unique addresses that bought over $100,000 NFTs have decreased.

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

Recent updates around the ecosystem, such as Cardano launching its algorithmic stablecoin Djed in January 2023, keep investors hooked. However, the coin’s TVL has continued to decline.

Data from DefiLlama suggested that ADA TVL hovered around $53.46 million. TVL was down 83% from all time.

Nevertheless, the medium-short-term on-chain calculations for ADA present slow price growth. In case a short-term bullish action price above $0.33 and then $0.40 will be the key for reversal. However, if the ADA price falls further, Cardano may return to the lower $0.30 mark.

Disclaimer: BeInCrypto strives to provide accurate and up-to-date information, but it will not be responsible for missing facts or inaccurate information. You comply and understand that you should use this information at your own risk. Cryptocurrencies are highly volatile financial assets, so do your research and make your own financial decisions.

Disclaimer

All information on our website is published in good faith and for general information purposes only. Any action the reader takes on the information contained on our website is strictly at their own risk.