Cryptocurrency Market Analysis, December 27

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Arman Shirinyan

The cryptocurrency market is still a wasteland as most of the assets remain in a stalemate


  • The success potential of AAVE
  • TVL of Cardano on the go

The market remains deadlocked as most of the big investors and traders have left the sector until the new year. Liquidity and volatility on most trading pairs are at an all time low, but even in adverse market conditions, there are some hidden gems emerging. However, safety should always be your number one priority.

The success potential of AAVE

For the past three days, AAVE has gone steadily higher despite the market stall. The reason behind it doesn’t seem to have anything to do with the fundamental changes around the project or any news that would propel it upwards. The only thing justifying the growth of the asset would be the speculative interest in the token.

AAVE chart
Source: TradingView

Since November, AAVE has been moving in a steeply declining price range with slowly declining trading volume. The pattern we saw on the asset’s daily chart clearly showed the potential for a reversal as the current trend is slowly fading.

The breakout of the first resistance level reflected in the 21-dma will set the AAVE for a breakout of the upper limit of the rangebound, which will then lead to a full trend reversal. This was a possibility in November when AAVE hit the $96 price level.

The project’s TVL remains at a high level, with $3.75 billion of assets locked into various smart contracts on the grid. Most of the TVL ($1.8B) is in loan agreements, while staking and pool2 account for a smaller share of the value locked up on the network.

TVL of Cardano on the go

It is common knowledge that Cardano is not the “go-to” network for DeFi enthusiasts, as this part of the industry only originates on the blockchain and has a lot to prove to cryptocurrency investors to attract them to the network. However, some DeFi solutions and platforms already exist and are working successfully which explains how Cardano got $54M in TVL during the dying market.

Cardano constantly celebrates the launch of new products like Optim Finance that attract more funding to the platform. Optim, for example, has already raised more than $1 million in TVL since launching just a few weeks ago. The largest holder of TVL on the network is the decentralized exchange Minswap, with more than $24 million in user funds locked up on the platform.

Unfortunately, the price performance of Cardano’s underlying cryptocurrency is unrelated to the increase in TVL and the network’s market cap. ADA lost more than 17% of its value in the latest December slump and has yet to find a basis for a reversal.

As of press time, ADA is trading at $0.26 with a 7.6% price increase over the past five days, which is most likely nothing more than a correction to the downtrend.

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