Each sharp parabolic rise can easily be written off as just another cycle of excitement.
At first glance, Cardano (ADA) seems to fit this narrative. After three consecutive red quarters, each recording losses of over 40% on average, ADA has become one of the weakest performing major altcoins this cycle. So is this trend finally starting to reverse?
From a technical perspective, ADA started the third quarter with a strong 30% rally, outperforming the broader altcoin market. More importantly, its gains so far this quarter are more than 2.3x that of Ethereum (ETH), indicating that capital could be returning to ADA as momentum begins to build.
But as we get closer to the charts, things start to look a little different.
In daily time period, ISLAND After rising above the $0.20 level, it retreated more than 2% in less than 48 hours; This is a resistance that could not be broken in mid-June. This repeated rejection ensures that the collapse will continue. Pair this with a nearly parabolic trend last week, and it’s no surprise to see traders taking profits rather than chasing higher prices.
At first glance, this makes it easy to label ADA’s rally as another round of excitement. The fundamentals don’t help the situation either. Cardano’s total value locked (TVL) dropped by approximately 68% last year. According to DefiLlama, TVL dropped from $276.19 million today to approximately $89.16 million; This sharp decline indicates that on-chain liquidity has not yet caught up with the recent price movement.
Taken together, the charts and on-chain data make ADA’s recent 2% pullback look like the beginning of a deeper correction. But markets are all about timing. And right now the timing suggests FOMO is still in play.
On-chain data strengthens ADA’s bullish case
Cardano’s strong start to the third quarter may be the first sign that momentum is finally turning in ADA’s favor.
But techies still have a job to do: turn resistance into support. Currently, $0.20 remains the key level to watch. A clean break above this level could be enough to bring FOMO, and $0.25 could be the next major hurdle. If this level breaks, a move towards $0.30 starts to look increasingly realistic.
The wider base is also starting to be supportive. altcoin momentum continues to improve, and July has historically been one of the strongest months for the industry. This makes ADA’s recent hold look more like a healthy reset rather than a trend reversal, keeping the focus on what the on-chain data is saying.
According to Santiment, Cardano has added 14,783 new non-empty wallets since its June 2023 low.
Timing is very important. Just weeks ago, ADA was at the center of FUD’s peak, with concerns over ecosystem growth and technical weakness. However, as TVL continued to decline, wallet growth continued to increase.
This is an interesting difference. Liquidity may still be lagging, but there is no lag in user engagement. Rather, it shows that belief is quietly building beneath the surface, increasing the likelihood that the price will eventually catch up. If ADA can reclaim $0.20, the path to $0.30 starts to look much more realistic.
