Cardano’s price hit a 2-year peak of $0.78 on Mar. 5, which saw ADA’s weekly timeframe gains exceed Solana’s performance.
Cardano and other altcoins have been on a tear over the past week, while Bitcoin’s dominance (BTC.D) slipped into a downtrend. On-chain analysis examines how the rapid growth of Cardano’s defi ecosystem could help ADA prices capture more value in the coming days.
ADA price has outperformed SOL in the past week
Bitcoin has grabbed most of the media headlines in March 2024 so far. However, Bitcoin dominance over the past week highlights how investors have begun diversifying portfolios as BTC price reaches an all-time high.
Market data shows that mega-cap Layer-1 altcoins have been attracting billions of dollars in capital inflows, and ADA has now emerged as one of the most sought-after coins in the current phase of the market rally.
ADA price has grown by 34% in the past week, racing from $0.61 on Feb 27 to a peak of $0.80 on Mar. 4. L1 rival network Solana’s (SOL) price has only gained 28% in the same time frame.
ADA has gained greater investor mind-share as the crypto market rally proceeds into its sixth consecutive month. The steady demand for defi products and services built on the Cardano network in 2024 could be a significant bullish catalyst.
Cardano defi TVL has attracted $98 million inflows in 2024
ADA price has outperformed Solana in the past week. And thanks to steady capital inflows recorded on the Cardano defi ecosystem, the gap could widen in the weeks ahead.
Cardano’s defi TVL hit an all-time high of $506 million on Mar. 4. As per DefiLlama data, this represents a remarkable $98 million boost since the start of the year.
An increase in TVL is a bullish signal for any Layer-1 network. It indicates more significant usage and adoption of projects built on the network. With Ethereum gas fees recently recording a dramatic gas fee surge on Mar. 5 and Solana’s distressing network outage recorded on Feb. 5, Cardano’s defi ecosystem could witness yet another wave of fund inflows.
If the scenario continues, the rising demand for defi services could propel ADA prices above the critical $1 resistance level in the coming weeks.
Forecast: Can Cardano’s price reach $1 again?
From an on-chain analysis perspective, ADA gaining investor mindshare over SOL at such a critical period of the altcoin market rally, and Ethereum gas fee surge could combine to drive Cardano prices up by another 25% towards the $1 milestone.
In further affirmation of this stance, IntoTheBlock’s global in/out of the money data shows that the following latest ADA price upswing, over 83% of existing ADA investors are now in profitable positions.
Highly profitable holders are often reluctant to sell their coins during a market rally. If the rally persists, this puts ADA in prime position for an accelerated rally towards $1.
However, regarding short-term price action, ADA faces significant resistance at $0.77 territory.
As seen in the chart, 32,930 existing holders had bought 953,210 ETH at the minimum price of $0.77. If the bulls can establish a steady support level above $0.78, a rapid upswing towards the $1 mark could be on the cards as predicted.
If Cardano sees a significant downtrend, ADA bulls could regroup to mount a buy-wall at the $0.69 area.