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Dan Gambardello, the founder of Crypto Capital Venture, sees the likelihood of an ADA price recovery. He names a potential trigger for this: Cardano DeFi ecosystem inflows.
Gambardello states that the growth in total value locked (TVL) on Cardano will prove to be the most obvious leading indicator of the incoming ADA price increase.
The growing Total Value Locked on Cardano will prove to be the most obvious leading indicator of the coming $ADA price increase. pic.twitter.com/UaLIOTFPG8
— Dan Gambardello (@cryptorecruitr) April 5, 2023
Cardano's total value locked, or TVL, denominated in ADA, keeps growing, setting new highs of 420.26 million ADA on March 22.
According to data from DefiLlama, Cardano's TVL stands at nearly $144 million. The value is even greater when staking is taken into account, coming in at about $155 million.
At the time of writing, Cardano's ADA was down 2.80% in the last 24 hours to $0.384. The crypto market is seeing fresh declines of Bitcoin, and the majority of crypto assets are recording losses at press time.
Why is Cardano TVL important?
The overall value of crypto assets deposited in a decentralized finance (DeFi) system, or in DeFi protocols in general, is known as the "total value locked" (TVL). It has become a crucial metric for assessing interest in this specific area.
A rise in a DeFi platform's TVL is often followed by an increase in liquidity and other factors that support the project's success.
Some or even all deposits on a DeFi platform may be denominated in its native token. Thus, the protocol's TVL in dollars increases in step with the value of its native token. In the case of Cardano, 406.69 million ADA are currently locked in DeFi.
Some analysts believe that the DeFi TVL might be used to determine whether the associated currency is priced fairly. A token may appear to be overvalued or undervalued depending on how extreme the connection is between its TVL and its market cap.
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