Cardano's price surge surpasses Solana as ADA gains investor mind-share and attracts significant capital inflows to its defi ecosystem.

Cardano’s value soared to $0.78 on Mar. 5, marking its highest point in two years, surpassing even Solana's recent performance gains.

In the last week, Cardano and various other alternative cryptocurrencies have surged, while Bitcoin’s dominance has waned, signaling a shift in investor focus. An analysis of on-chain data delves into how the rapid expansion of Cardano’s decentralized finance (defi) ecosystem might drive up ADA prices in the near future.

ADA's Recent Performance Compared to SOL

Bitcoin has monopolized much of the media spotlight in March 2024. However, the decreasing dominance of Bitcoin over the past week underscores investors' inclination towards diversification, particularly as Bitcoin reaches record highs.

Market indicators reveal that major Layer-1 altcoins have attracted substantial capital inflows, with ADA emerging as a top choice amidst the current market surge.

ADA's value surged by 34% over the past week, climbing from $0.61 on Feb 27 to a peak of $0.80 on Mar. 4. In comparison, Solana (SOL) saw a 28% increase during the same period.

As the crypto market rally extends into its sixth consecutive month, ADA has garnered significant attention from investors. The sustained demand for defi applications and services built on the Cardano network could serve as a major catalyst for further price growth.

Cardano's Defi Total Value Locked (TVL) Sees Influx of $98 Million in 2024

ADA has outpaced Solana's performance over the past week, and with consistent capital inflows into Cardano's defi ecosystem, this trend may continue in the coming weeks.

On Mar. 4, Cardano's defi TVL reached an all-time high of $506 million. According to DefiLlama data, this marks a substantial increase of $98 million since the beginning of the year.

An uptick in TVL signals positive sentiment towards a Layer-1 network, indicating increased usage and adoption of projects within the ecosystem. With recent surges in Ethereum gas fees and Solana's network disruptions, Cardano's defi ecosystem could attract even more capital inflows.

If this trend persists, the growing demand for defi services could propel ADA's price above the critical $1 level in the near future.

Forecast: Will Cardano Reach $1 Again?

From an on-chain analysis perspective, ADA's recent outperformance compared to SOL, coupled with the surge in Ethereum gas fees, could drive ADA prices up by an additional 25%, inching closer to the $1 milestone.

Supporting this outlook, data from IntoTheBlock indicates that over 83% of current ADA investors are now in profitable positions following the recent price uptrend.

Investors who are in profitable positions tend to hold onto their assets during market rallies, potentially fueling further upward momentum for ADA.

However, in terms of short-term price action, ADA may encounter significant resistance around the $0.77 level.

Chart analysis reveals that 32,930 existing holders acquired 953,210 ETH at a minimum price of $0.77. If buyers can establish strong support above $0.78, it could pave the way for a swift climb towards $1, as anticipated.

In the event of a notable downtrend, ADA bulls may regroup to establish a support level around $0.69.