How will the price of Cardano (ADA) cope with the growth of DeFi and NFT?


The Cardano (ADA) price action provided some relief to holders as the price broke above the bearish trendline.

Cardano price action has been sluggish lately, with ADA trading at $0.3186 at the time of writing, up just 0.74% on the day. But the price is down 89.81% from its all-time high in September 2021.

From a technical perspective, Cardano price has been trading in a bearish trendline for more than two weeks. Although at the time of writing, the price action has started to clear.

ADAUSDT Intraday Chart | Source: TradingView

While the ADA price breaking the bearish trendline provided some short-term relief for holders, it is important for the price to settle above the $0.330 resistance level and then convert it into support.

old ada running

The recent near-term volatility in the price of Cardano has brought some of the older coins back into circulation. The age consumption statistic for ADA highlighted that after the price action slump, a notable number of older ADA were moved.

ADA age consumption | Source: sentiment

As of November 24, more than 38.58 billion ADA was transferred on-chain. Spikes in the age consumption chart indicate that a large number of tokens are advancing after a long period of inactivity. This may indicate a redistribution or some sort of sale.

That said, net realized profit/loss (NRPL) for ADA has been largely in anticipation of losses for holders for most of the past six months. The metric calculates the net profit or loss for all coins issued in the time frame under consideration.

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Cardano NRPL and Velocity | Source: sentiment

Low NRPL values ‚Äč‚Äčindicated capital outflows. However, if the bulls can hold the price above the $0.330 level, there could be a reversal from a significant decline in the NRPL. That said, with speed showing a steady increase, it means the coin was used more frequently in transactions over the specified time frame.

Cardano NFT and DeFi Space are still boring

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

At that time, the price of ADA rose rapidly. However, at the time of writing, the NFT landscape appears to be losing its luster.

Total NFT trading volume (USD) is now very low compared to June and July 2022. While NFT trading volume remains above average, the unique addresses that purchased over $100,000 worth of NFTs are declining.

Cardano NFT Stats | Source: sentiment

Recent updates around the ecosystem, such as Cardano launching its algorithmic stablecoin Djed in January 2023, have kept investors engaged. However, the TVL of the coin continues to fall.

Cardano TVL | Source: Difilama

Data from Defilama suggested that ADA TVL hovered around the $53.46 million mark. The TVL fell 83% from its all-time high.

Nevertheless, on-chain metrics for the medium to short term for ADA show a slow price increase. In case of a near-term bullish move above $0.33 and then $0.40, a reversal will be crucial. However, if the ADA price falls further, Cardano could revisit the lows of $0.30.

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