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Why ADA’s recovery path could be tricky despite Cardano dazzling on this front
- Grayscale’s Q1 report highlights Cardano’s growing prominence in the smart contract ecosystem.
- Despite the recent market dip, positive developments and steady trading activity reinforce Cardano’s long-term potential.
Grayscale just unveiled its first quarter reports, which turned out to be good news for Cardano [ADA] enthusiasts. This was because the report highlighted the Digital Large Cap and Defi funds, with Cardano occupying a prominent position.
The development could be a cause for celebration for ADA holders, as the report promises exciting prospects for the future.
– Read Cardano’s [ADA] Price Prediction 2023-24
Grayscale retains Cardano
As per Grayscale’s Q1 report ADA occupied a higher position in the updated fund component weightings. With a weight of 28.13%, Cardano’s prominence increased slightly as compared to the previous quarter.
This was an indication of its growing significance in the smart contract ecosystem. This was also evident in Grayscale’s GSCPxE Fund, which provides investors with exposure to various smart contract platforms beyond Ethereum [ETH], with ADA being a major component of the fund.
However, in the Grayscale Digital Large Cap Fund, Cardano’s share witnessed a slight drop from 1.86% in Q4 2022 to 1.69% in Q1 2023. Despite this setback, ADA’s inclusion in both funds highlighted its growing relevance in digital assets and its potential to deliver significant returns to investors.
Cardano’s price movement remains gray
Despite the positive developments for ADA in Grayscale’s Q1 report, the digital asset was experiencing a slump in the market. ADA was trading at a loss as of this writing, marking the second consecutive day of decline. Its current trading value was around $0.38, with a less than 1% loss.
However, this downward trend is not unique to ADA, as the digital asset market has experienced a dip in recent days. Nevertheless, the future remains bright for ADA, with its growing relevance in the smart contract ecosystem offering exciting prospects for investors.
Source: TradingView
Despite the recent market dip, ADA’s Relative Strength Index (RSI) managed to stay slightly above the 50 mark. Additionally, the digital asset’s price movement remained above its long and short Moving Averages, further highlighting its positive momentum. While short-term market fluctuations are expected, Cardano’s long-term potential was reinforced by its growing significance.
TVL sees a bump
ADA’s Total Value Locked (TVL) was over $139 million per DefiLlama. The value indicated a healthy interest in the digital asset’s network. What was noteworthy about the TVL was the recent uptrend after a prolonged period of decline.
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Additionally, the volume indicator for ADA didn’t show any signs of massive activity, reflecting the lack of excitement in the current price movement. As of this writing, the volume was around 272 million, indicating that trading activity remained steady.
Source: TradingView
