Cardano (ADA) is making headlines this week as its price rebounds from recent lows, even as activity in its decentralized finance (DeFi) sector continues to decline. The cryptocurrency, currently trading near $0.69, is drawing attention from traders and investors who are watching for signs of a sustained bullish reversal.
Cardano’s Price Bounces Back Amid Market Uncertainty
After dipping to support at $0.65, Cardano has managed to recover, testing resistance at $0.69. This move comes during a period of consolidation across the broader crypto market, influenced by ongoing global economic uncertainty and recent developments around U.S. tariffs. Despite these headwinds, ADA’s price action is showing resilience, with technical indicators suggesting a possible shift in momentum.
Growing Trader Interest and Bullish Signals
One of the key metrics supporting Cardano’s positive outlook is the increase in derivatives market activity. Open Interest (OI) in ADA futures has risen to $831 million, indicating that more traders are positioning themselves for potential price movements. On Binance, the long-to-short ratio stands at 2.83, reflecting a clear bullish bias among futures traders. Additionally, the recent liquidation data—where more short positions were closed than longs—hints at the possibility of a short squeeze, which could further fuel upward price action.
Technical analysis tools are also flashing encouraging signals. The SuperTrend indicator, which uses market volatility to identify trends, has issued a buy signal as ADA’s price moved above its trend line. Meanwhile, the Relative Strength Index (RSI) is showing early signs of recovery, and a break above $0.70 could reinforce bullish momentum if the RSI climbs above the 50 mark.
ADA/USD daily chart
DeFi TVL Decline: A Cautionary Note
Despite these positive signs, there are reasons for caution. Cardano’s DeFi Total Value Locked (TVL)—a measure of the value of assets deposited in its smart contracts—has dropped to around $317 million, down from a peak of $414 million in May. This decline suggests that some investors are withdrawing funds from Cardano’s DeFi ecosystem, which could signal reduced demand for ADA in the short term.
A lower TVL often reflects waning confidence in a blockchain’s DeFi offerings and can lead to decreased usage of the native token for transactions, staking, and governance. This trend could act as a headwind for ADA’s price recovery, especially if it persists.
Mixed Technical Outlook: MACD Remains Bearish
While some indicators are turning positive, others remain cautious. The Moving Average Convergence Divergence (MACD) indicator, for example, continues to show bearish sentiment after issuing a sell signal in mid-May. Traders are advised to keep an eye on this metric, as a sustained bearish MACD could limit the scope of any near-term rally.
What’s Next for Cardano?
Cardano’s current price action reflects a tug-of-war between bullish technical signals and the reality of declining DeFi activity. If ADA can break above the $0.70 resistance and maintain momentum, a move toward the $1.00 region is possible. However, continued weakness in DeFi participation could slow or cap gains.
For those following Cardano, it’s a time to watch key levels and indicators closely. The interplay between market sentiment, technical signals, and ecosystem fundamentals will likely determine ADA’s next major move.
