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The anticipation surrounding the launch of Exchange Traded Funds (ETFs) is creating significant buzz in the cryptocurrency market, with Cardano (ADA) poised to potentially benefit from this momentum.
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The 75% likelihood of a Cardano ETF being approved this year presents a rare opportunity, yet uncertainty remains over whether ADA can capitalize on it due to current market conditions.
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“ADA’s price momentum seems stymied by profit-taking behavior, according to market analysts from COINOTAG, which could complicate its ascent. “
This article delves into the potential impact of ETF approvals on Cardano (ADA), exploring market conditions and predictions for the altcoin.
Can Cardano turn lag into leadership?
At press time, Bitcoin had bulldozed past its March resistance at $96k, with the crypto already testing $97k for the first time in over two months. Meanwhile, Cardano is exactly where it was a month ago, still struggling to reclaim the $0.80-zone.
Usually, this kind of lag sets the stage for altcoin catch-up rallies. However, ADA isn’t playing along. Why? Because every time it flirts with $0.70, one thing happens – Profit-takers flood the market.
Its Transaction Volume in Profit-to-Loss Ratio spikes like clockwork, showing that as soon as ADA gets some upward momentum, a wave of holders starts cashing out.
Additionally, Cardano’s NVT ratio just hit a three-month high, and you’ve got a situation where network value has been outpacing actual transaction activity. In other words, the altcoin’s price might be getting ahead of itself.
Source: Santiment
Taken together, these metrics highlighted a clear underlying weakness – Buyers aren’t stepping up, capital inflows are sluggish, and resistance at the top keeps slamming the brakes on any rally attempt.
If this keeps up, a correction may beat the breakout to the finish line.
In this context, even the 75% odds of a Cardano ETF, while promising on paper, may seem optimistic without stronger on-chain support.
The ETF race no altcoin wants to lose
The TOTAL3 index, which tracks the total crypto market cap excluding Bitcoin and Ethereum, is now approaching a critical supply wall, suggesting potential resistance for altcoins.
At the same time, Bitcoin’s dominance is close to 65% – A level that historically signals capital concentration in BTC and potential outflows from altcoins.
Source: TradingView (BTC.D)
According to COINOTAG, with liquidity thinning across non-BTC, non-ETH assets, the need for institutional inflows into altcoins is more pressing than ever. This sets the stage for the intensifying ETF race, as altcoins seek to stay competitive in an increasingly BTC-heavy market landscape.
Right now, momentum seems to be favoring Solana [SOL], as evidenced by Bloomberg analysts assigning a 90% probability to the launch of a Solana ETF.
Moreover, the TRUMP memecoin launch on the Solana network has further reinforced its position as a key contender for institutional capital and ETF approval.
Therefore, for Cardano to remain competitive, it is crucial to reclaim overhead resistance zones.
Failure to do so risks losing ground to competing altcoins. The first altcoin to secure SEC approval for an ETF will certainly gain a lead in market momentum.
Conclusion
In summary, while the prospect of a Cardano ETF is promising, the altcoin must overcome significant on-chain hurdles to take full advantage of this opportunity. Sustainable growth hinges on increased buying interest and a shift from profit-taking behavior. If growth persists, Cardano may find itself at the forefront of altcoin investment strategies.
