- Cardano price has formed a double-top pattern on the 4H chart.
- DeFi TVL in its ecosystem has surged to over $100 million.
Cardano price has been in a consolidation phase in the past few days as the remarkable comeback eases. ADA/USD was trading at $0.3756 on Friday, a few points below the year-to-date high of $0.3886. Like other cryptocurrencies, Cardano has soared by more than 57% from the lowest point in 2022.
Cardano DeFi activity rebounds
Cardano crypto price recovery has coincided with a sharp increase of activity in its DeFi ecosystem. Data compiled by DeFi Llama shows that the total value locked (TVL) in its ecosystem has risen to more than $100 million, the highest level since October last year.
Most DeFi apps in Cardano have seen the volume of capital deployed in their ecosystems rise recently. MinSwap, the biggest DEX in its ecosystem, has seen the TVL rise by 40% in the past 30 days to over $30 million. Similarly, Meld, Indigo, WingRiders, and MuesliSwap have seen their TVLs jump to over $10 million.
Other fast-growing DeFi apps in Cardano are SundaeSwap, Optim Finance, Revuto, and Genius Yield among others. A strong performance of its DeFi ecosystem is a good sign for ADA price since the coin is used to handle transactions.
There are other reasons why Cardano price could rally in 2023. For example, the developers will launch USDA, a stablecoin on the Anses platform. Another algorithmic stablecoin known as DJED is also being developed.
Meanwhile, a closer look at Cardano’s on-chain data shows that the number of whales is significantly lower than in other blockchains. According to Into the Block, Cardano now has 2 whales who hold 1.4 billion ADA coins. They have been gradually adding their positions from 731 million ADA coins in April last year. As shown below, most ADA coins are held by retail investors who hold 21 billion coins followed by investors who hold 10 billion.
Cardano price prediction
The 4H chart shows that the ADA price has been in a spectacular comeback in the past few months. This strong performance is in line with what I wrote in this prediction. Now, it has formed what looks like a double-top pattern, which is usually a bearish sign. The upper part of the pattern is at $0.3866 while the neckline is at $0.3466. Cardano is also slightly above the 25-day moving average.
Therefore, Cardano will likely have a bearish breakout in the coming days as buyers start to take profit. If this happens, the initial support level to watch will be at the neckline at $0.3480 followed by $0.3300, the highest point on December 5.
