DeFi and NFTs lose ground: what impact for the price of Cardano?

Cardano (ADA) recently crossed a downtrend line, giving its holders a breath of fresh air.

Cardano is undoubtedly one of the biggest victims of the current bear market. As of this writing, the token is trading at $0.3186, up just 0.74% on the day and down 89.81% from its all-time high in September 2021.

In fact, Cardano (ADA) price is just starting to break out of a downtrend line that it has been following for the last two weeks.

ADA/USD | Source: commercial view

While this move has given the holders a small glimmer of hope, it is crucial that the price of ADA breaks through the $0.330 resistance level and turns it into support.

38.58 billion ADA moved

The short-term volatility in the price of Cardano appears to have put the old coins back into circulation. In fact, ADA’s Age Consumed indicator reveals that a significant amount of tokens have been moved after the recent market decline.

Worn Age Marker | Source: Sanctification

On Nov. 24, over 38.58 billion ADA was transferred on-chain.

The peaks in the Age Consumed graph indicate the movement of large amounts of ADA after a long period of inactivity. This could be a massive redistribution or resale of assets.

That said, the Net Realized Profit/Loss (NRPL) indicator has been in negative territory for the past six months. As a reminder, the NRPL indicator calculates the profit and loss of all coins sold during a given period.

Cardano Course
NRPL by ADA | Source: Sanctification

Cardano: TVL down 83%

The non-fungible token (NFT) market is a significant contributor to the price action of Cardano. According to a report released in late October, Cardano is the third largest blockchain in terms of NFT transactions.

Total NFT trading volume (in dollars) has declined sharply compared to June and July 2022. While trading volumes remain above average, the number of unique addresses that have purchased more than $100,000 NFT has dropped significantly.

NFT trading volume on Cardano
Cardano NFT Trading Volume | Source: Sanctification

Recent announcements from the Cardano development team, such as the launch of the algorithmic stablecoin Djed in January 2023, give hope to investors. That said, the network’s Total Locked Value (TVL) continues to plummet.

Cardano TVL | Source: Defillama

According to DefiLlama, Cardano’s TVL currently hovers around $53.46 million, down 83% from its all-time high.

However, the medium and short-term on-chain indicators suggest slow growth in the price of Cardano. If the token manages to clear $0.33 initially and $0.40 later, it could turn green again. However, if the price of ADA falls further, it is likely to drop below $0.30.


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