Each sharp parabolic rise can easily be written off as another hype cycle.
At first glance, Cardano (ADA) seems to fit this narrative. After three consecutive red quarters, each recording average losses of over 40%, ADA has become one of the weakest performing major altcoins this cycle. But has this trend finally begun to reverse?
Technically, ADA started the third quarter with a strong 30% rise, outperforming the broader altcoin market. Notably, its gains are 2.3x larger than those of Ethereum (ETH) so far this quarter, suggesting capital may return to ADA as momentum begins to build.
But when you zoom in on the charts, things look a little different.
On the daily time frame, Ada It has already fallen more than 2% in less than 48 hours after rising above the $0.20 level, a resistance it also failed to clear in mid-June. This repeated rejection keeps the collapse firmly in play. Pair that with a near-parabolic move over the past week, and it is not surprising to see traders taking profits rather than chasing higher prices.
At first glance, this makes it easy to dismiss the ADA rise as just another hype cycle. Fundamentals don’t help in this case either. Cardano’s total value locked (TVL) has declined by approximately 68% over the past year. According to DefiLlama, TVL fell from $276.19 million to around $89.16 million today, a sharp decline that suggests cross-chain liquidity has yet to catch up with the recent price movement.
Taken together, the charts and on-chain data make ADA’s recent 2% decline look like the beginning of a deeper correction. But markets are all about timing. For now, the timing suggests that FOMO is still here.
On-chain data reinforces the bullish case for ADA
Cardano’s strong start to Q3 could be the first sign that momentum has finally shifted in ADA’s favor.
However, technicians still have one task to do: convert resistance into support. For now, $0.20 remains the key level to watch. A break above this level could be enough to bring on FOMO, as $0.25 would be the next major hurdle. If this level breaks down, a move towards $0.30 will look increasingly realistic.
The broader backdrop has also become supportive. Alternative currency batch Growth continues, and July has historically been one of the strongest months for the sector. This makes the recent cooling off period for ADA look more like a healthy reset than a trend reversal, putting the focus on what the on-chain data is saying.
According to Santiment, Cardano has added 14,783 new non-empty wallets since its lowest point in June 2023.
Timing is key. Just weeks ago, ADA was at the center of a FUD peak, with concerns about ecosystem growth and technical weakness. However, portfolio growth continued to rise even as the value of TVL continued to decline.
This is an interesting difference. Liquidity may still be lagging, but user engagement is not. If anything, it indicates that conviction is quietly building beneath the surface, increasing the odds that the price will eventually rise. If ADA can recover $0.20, the path towards $0.30 looks more realistic.
