Cardano Price Dives 60% as TVL and Stablecoins Weaken

Cardano’s price falls 60% from October amid waning TVL and stablecoin supply, with a potential wedge breakout on the radar amid RSI signals and shrinking open interest.

Rich by Coin

2025-12-26

Cardano price has dropped 60% since its October high as its TVL and stablecoin supply weakened. Cardano price has been in a downtrend, dropping nearly 25% from its December high and 63% from its highest point in October. Its market cap has shed from $35.1 billion to around $12.9 billion at press time. According to data from DefiLlama, the total value locked across all DeFi protocols built on the blockchain dropped to $215.5 million from its August high of $544 million.

Declining TVL hints at lower user participation and could point to investors losing confidence in the network’s growth potential. The total market cap of stablecoins on the blockchain has also dropped, from a November high of $40.48 million to $37.68 million at press time. Leveraged traders have also seemed to have lost interest in the token. Data from CoinGlass shows that ADA futures open interest has dropped from $1.72 billion observed in October to $651 million.

Together, these deteriorating metrics have kept investors cautious and sentiment fragile, which has weighed heavily on price performance. On the daily chart, Cardano price has been forming a falling wedge since early October this year. The pattern is formed of two converging and descending trendlines. Cardano price has formed a falling wedge pattern on the daily chart.

Historically, when an asset breaks out of such a structure from the upper side, it often signals that the ongoing downtrend has lost its momentum. A look at momentum indicators such as RSI, which has formed a bullish divergence, also indicates a potential rebound could be on the way. For now, traders will be closely watching the 20-day SMA at $0.39, a break above which would confirm a breakout from the wedge pattern. In that case, ADA could potentially rally to $0.51, a target calculated by adding the height of the wedge to the pattern breakout price.

At press time, it stood nearly 45% above the current price. On the contrary, a breakdown below the lower trendline of the pattern could lead to a fall to $0.30, a level that has acted as a strong support floor throughout last year.