Cardano’s DeFi activity makes an impressive rebound, thanks to…
- Cardano’s DEX volume surged since the launch of Djed.
- ADA’s key indicators were down which could impact its value.
Hit hard by the bear market of 2022, Cardano [ADA] experienced a change of fortune on its DeFi front. The total value locked (TVL) on the network’s smart contracts hit $102 million, recording its best performance in six months.
Furthermore, the total decentralized exchange (DEX) volume on the chain also hit its 10-month high recently, having attained a 36% week-over-week (WoW) growth at press time.
February has been welcoming for Cardano. But the question is- What could be fueling this rise?
How much are 1,10,100 ADAs worth today?
The ‘Djed’ Factor
A lot of credit behind Cardano’s impressive DeFi growth could be given to its recently launched over-collateralized stablecoin, Djed.
It is an established fact that stablecoins decrease volatility in crypto markets and act as a useful hedge against wild swings in price. This increases their utility in decentralized finance as activities like borrowing, lending, and derivatives require a stable value.
Unsurprisingly, Djed’s contribution to Cardano’s liquidity echoed the same sentiment. Two weeks after launch, the stablecoin accounted for more than 8% of Cardano’s TVL, per data from DeFiLlama.
Additionally, more enhancements were expected as part of an upcoming upgrade which could lead to greater deployment of DeFi protocols on the network.
This upgrade will bring new cryptographic primitives to #Cardano, encouraging greater interoperability and secure cross-chain DApp development with #Plutus.
— Input Output (@InputOutputHK) February 8, 2023
Testing times ahead for ADA
In spite of the above developments, the picture was not rosy. ADA’s weighted sentiment which was favorable in the week following the launch of Djed, went into the negative territory.
The sentiment could have been hit because of the development activity which plummeted over the last week. The daily active addresses which spiked following Djed’s launch showed contraction.
Realistic or not, here’s ADA’s market cap in BTC’s terms
At the time of writing, ADA was down 1.12% to be valued at $0.3626, as per CoinMarketCap. February has seen a strong wave of selling and the coin has lost more than 6% of its value in the last week.
At press time, the Relative Strength Index (RSI) dipped below the neutral 50 mark, indicating that selling pressure was back. The Moving Average Convergence Divergence (MACD) continued to move below the signal line, suggesting a further downward movement.
The support at $0.363 remained an important area for the next few sessions.