Cardano Price Forecast as DeFi TVL on Cardano Doubles Since Start of Year – $1 ADA Incoming?
The Cardano price has gained by 2.5% in the past 24 hours, reaching $0.398260 following a 1.5% rise for the market as a whole. This level makes for an 11% rise in a fortnight and a 35% increase in the last 30 days, with ADA’s price being helped on by the launch of Cardano-based stablecoin Djed last week.
The arrival of Djed has stimulated extra demand for ADA, which is one of the main reserve tokens for the new algorithmic stablecoin. It has also resulted in more use of Cardano itself, with the layer-one network seeing its total value locked (TVL) rise by more than 100% since the start of January.
Cardano Price Forecast as DeFi TVL on Cardano Doubles Since Start of Year – $1 ADA Incoming?
ADA’s indicators suggest that it’s a good time for the altcoin right now, with its 30-day moving average (red) close to overtaking its 200-day (blue). If it does rise above the longer term average form a golden cross, the coin could be in line for further gains.
At the same time, ADA’s relative strength index (purple) continues to hover around the 60 mark. It looks like it’s in a position to continue rising again, with the RSI currently rebounding each time it suffers a dip.
As noted above, ADA has been doing well largely because of the launch of the Djed (DJED) stablecoin. So far, Djed’s reserve have taken 30.5 million ADA out of circulation, with this total likely to continue rising in the days and weeks to come.
In other words, demand for ADA is rising, while it’s supply is shrinking. Hence, the recent rallies, yet it’s important to note that DJED currently has a supply of only $2 million, implying that it has plenty of growth left in store.
Partly because of Djed’s arrival, Cardano’s TVL has spiked from about $50 million on January 1 of this year to $108 million, as of writing. This suggests that Djed has sparked growing usage of Cardano, with Cardano-based DEXes MuesliSwap and Minswap already listing the new stablecoin.
$Djed and $Shen are coming to MuesliSwap next week! 🥣 Stay tuned for more announcements 👀 pic.twitter.com/RFrF78pgm1
— MuesliSwap Team🥛 (@MuesliSwapTeam) January 26, 2023
It’s likely that this is only the beginning of Djed’s positive impact on Cardano adoption. That’s because the cryptocurrency ecosystem has arguably been crying out for a reliable stablecoin ever since the collapse of Terra in May, and it seems that Djed fits this bill.
For example, Djed is backed by a reserve of multiple cryptocurrencies and will have an over-collateralization ratio of between 400% and 800%. Such a system is intended to protect Djed against sudden falls in the value of the coins backing it.
And the thing is, with an upcoming Cardano upgrade set to increase its cross-chain interoperability, there’s a very good chance that Djed could attract use from beyond the Cardano ecosystem. This includes from the Bitcoin and Ethereum domains.
There will be another hard-fork event in February. CIP-0049 will increase #Cardano's interoperability with #Bitcoin, #Ethereum, and other blockchains. Plutus developers can write an application that can verify ECDSA and Schnorr cryptographic signatures.
— Cardano YODA (@JaromirTesar) January 26, 2023
In particular, the incoming upgrade will “support ECDSA and Schnorr cryptographic signatures to make it easier for developers to build cross-chain apps.” As such, Djed could end up witnessing significant usage.
More generally, we could also see Cardano itself attract wider usage. Its ecosystem has already been growing in the context of a bear market, with more than 1,100 apps and projects now building on its network, as well as more than 110 projects already launched.
However, now that the market appears to be recovering steadily, the growth of Cardano could really accelerate over the course of 2023.
The weekly #Cardano development update is now live on #EssentialCardano.
— Input Output (@InputOutputHK) January 27, 2023
Check out the key highlights from this week and get the latest on development progress in core technology, wallets and services, smart contracts, scaling and governance.👇https://t.co/YFsUakj3sL
As such, there’s every chance ADA could return to $1 by the middle of the year. And from there, who knows, with some experts setting a long-term target of around $5.30 for the token.
Alternatives to Cardano
As promising as ADA is right now, it isn’t the only high-potential cryptocurrency in the market. Accordingly, we’ve reviewed the top 15 cryptocurrencies for 2023, as analyzed by the CryptoNews Industry Talk team.
The list is updated weekly with new altcoins and ICO projects.
Disclaimer: The Industry Talk section features insights by crypto industry players and is not a part of the editorial content of Cryptonews.com.
