While Bitcoin surges past key resistance levels, sparking optimism across the cryptocurrency market, Cardano (ADA) is conspicuously lagging behind. Despite the overall crypto market capitalization bouncing back to $3 trillion, ADA remains tethered below its late Q1 highs. The missing ingredient, according to market analysts, is the catalyst of Exchange Traded Funds (ETFs). Bloomberg analysts give ADA a respectable 75% chance of securing an ETF this year, trailing behind Solana and XRP, both boasting a 90% probability. This raises a crucial question: Does Cardano possess the underlying on-chain strength to justify this ETF optimism, or is it a premature aspiration?
JUST IN: Bloomberg ETF analysts now estimate a 75% chance the SEC will approve a Cardano $ADA ETF. pic.twitter.com/SNjYG0fUoj
— TapTools (@TapTools) May 1, 2025
Profit-Takers and Network Value Weigh on ADA
As Bitcoin tested the $97,000 mark, breaking through its March resistance, Cardano found itself stuck in neutral around the $0.80 zone, a level it occupied a month prior. Historically, such underperformance from a major altcoin would typically precede a catch-up rally. However, ADA’s price action suggests a different narrative. Each time Cardano attempts to breach the $0.70 threshold, a wave of profit-taking activity floods the market. This is evident in the Transaction Volume in Profit-to-Loss Ratio, which spikes predictably with any upward price movement, indicating that holders are quick to cash out at the first sign of gains.
Furthermore, Cardano’s Network Value to Transactions (NVT) ratio has reached a three-month peak. This metric suggests that the network’s valuation is increasing at a faster pace than the actual transaction activity occurring on the blockchain. In simpler terms, the price of ADA might be outpacing its fundamental usage, signaling a potential overvaluation.
Combined, these on-chain indicators paint a picture of underlying weakness: a lack of sustained buyer interest, sluggish capital inflows, and significant resistance preventing any substantial price appreciation. If these trends persist, Cardano risks a price correction before it can achieve a significant breakout. Consequently, even the promising 75% ETF probability might appear overly optimistic without stronger on-chain support.
The High-Stakes ETF Race
The broader altcoin market, represented by the TOTAL3 index, is approaching a critical supply barrier, hinting at potential resistance for altcoins in general. Simultaneously, Bitcoin’s dominance is nearing 65%, a level historically associated with capital concentrating in BTC and potentially flowing out of altcoins. With liquidity thinning across assets outside of Bitcoin and Ethereum, the need for institutional investment through ETFs has become increasingly urgent for altcoins to remain competitive.
This sets the stage for a fierce ETF race. Currently, Solana appears to have the momentum, evidenced by Bloomberg analysts’ 90% ETF probability and the recent buzz surrounding the TRUMP memecoin launch on its network, potentially attracting institutional capital. For Cardano to remain a strong contender, overcoming its overhead resistance zones is paramount. Failure to do so could result in losing ground to rivals in this crucial ETF race, where the first mover to secure SEC approval stands to gain significant market momentum.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
Also Read: Cardano Leads Ethereum in Development: Is a Major Price Rally Next for ADA?
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
