Cardano‘s price soared more than 19% on December 9th, reaching $0.64, its highest level in the last 18 months. In December, it showed a 75% increase. Let’s take a look at the data that investors should pay attention to for ADA, which is trading at $0.59 at the time of writing.
There is no prominent fundamental reason behind this price increase in Cardano. Instead, it was among the altcoins that accompanied Bitcoin‘s rise this month. Notably, since the peak on December 6th, the 3.5% drop in Bitcoin’s dominance in the crypto market has led many investors to sell off Bitcoin and search for profit opportunities in altcoins.
Such capital rotations are common in the crypto market, and investors often transfer their profits from Bitcoin to smaller and riskier crypto assets following a strong price rally. This situation reminds us of the performance of altcoins at the beginning of November when Bitcoin’s market share was declining.
The rise in Cardano’s price is consistent with the remarkable increase in the total investment amount made in ADA across the blockchain ecosystem. On December 9th, the total value locked (TVL) in Cardano’s decentralized applications (dapps) reached a record level of 765.22 million ADA.
Lenfi, a lending and borrowing protocol operating on the Cardano network, saw its ADA reserves increase by 90%. The increase in TVL effectively removes ADA tokens from active circulation and could cause the price to rise in situations of high demand, as seen in the current rally.
Cardano’s surge on December 9th coincided with the liquidation of short positions worth approximately $5 million compared to the previous day. This led to significant purchases in the market and contributed to the rise in ADA’s price.