Cardano (ADA) has recently seen a notable increase in its Total Value Locked (TVL), crossing the $700 million mark, leading to questions about the potential impact on ADA’s price. With significant network growth and a boost in decentralized exchange (DEX) activity, many are wondering: could Cardano’s development help ADA break past the $3 threshold, a high it reached in the 2021 bull cycle?

What Is Driving Cardano’s TVL Growth?

Total Value Locked (TVL) is an important metric in the decentralized finance (DeFi) space, measuring the total capital locked into a blockchain’s DeFi protocols. Cardano’s TVL increase, reaching $713 million, indicates improved investor trust and interest in the Cardano ecosystem. This marks a strong recovery from the near $500 million TVL observed in previous cycles.

Key protocols behind this surge include two lending platforms—Liqwid and Indigo—as well as the decentralized exchange (DEX) Minswap. Together, these protocols control over 50% of the network’s TVL, amounting to about $430 million. As TVL rises, it often reflects a growing confidence among investors, which could influence ADA’s price in a positive way.

DEX Trading Volume and Network Activity Growth

In addition to the TVL rise, Cardano has seen an impressive increase in DEX trading volume. In early November, DEX volume stood at $1.9 million. By late December, this number surged to $31.5 million—an increase of 17X in just one month. This rise in trading volume highlights a growing level of user activity and overall network adoption, which could bode well for ADA’s price outlook.

The increase in user activity is also reflected in the number of active users on the Cardano network. From about 30,000 active users in early November, the number has grown to nearly 90,000. This 100% rise in user engagement over the past month is a clear indicator that Cardano’s ecosystem is expanding, which could contribute to ADA’s long-term price potential.

What This Means for ADA’s Price

The surge in Cardano’s network growth and TVL could lead to positive price movement for ADA. Historically, periods of network expansion and growth in user activity have been followed by notable price increases. Last month, ADA surged by 272%, reaching a yearly high of $1.30. If the network continues to grow, it could set the stage for ADA to revisit its 2021 highs.

In 2021, ADA reached a peak of $3, and the current market conditions could indicate that it’s on track to potentially break those levels. To confirm a bullish trend toward the $3 mark, ADA needs to maintain strong support levels, particularly in the $1 to $1.5 range. These price levels were critical in the 2021 cycle, where ADA consolidated for several months before experiencing a breakout. If history repeats itself, ADA may fluctuate within this range before making another move upward.

Could ADA Hit $3 Again?

While it’s too early to predict with certainty, the increased network activity and TVL on the Cardano blockchain suggest that ADA could be well-positioned to approach its 2021 highs. A key factor in achieving this would be maintaining support in the $1 to $1.5 range. If ADA can hold above these levels, the token could see further price movement toward $3 in the future.

Conclusion: Strong Fundamentals Support ADA’s Recent Rally

Cardano’s recent TVL increase and user activity growth highlight the underlying strength of the network, which plays a critical role in the current price rally. As more users engage with the network and DeFi protocols, investor confidence in ADA continues to grow.

Although ADA may experience some consolidation between $1 and $1.5, the ongoing network expansion and TVL growth could provide the momentum needed for ADA to break through resistance and potentially reach $3 once again. The combination of strong fundamentals, growing network activity, and increased trading volume suggests that ADA’s bullish trend could continue.