Caradano\u2019s native gas-paying token,\u00a0ADA<\/a>,\u00a0received a big blow at the start of June when the United States Securities and Exchange Commission (SEC) regarded it as a security in its lawsuits against Binance<\/a> and Coinbase<\/a>.<\/p>\n The lawsuit triggered a 42.5% drop in ADA\u2019s\u00a0price from $0.37 to a two-year low of $0.21 within a few days.<\/p>\n Additionally, the token faced further downside selling pressure due to delisting on U.S.-based trading apps<\/a> Robinhood and eToro.<\/p>\n However, under the hood, the network has been making progress with an uptick in decentralized finance (DeFi) activity after a scalability upgrade in May.<\/p>\n The technical and on-chain analysis of the token also shows potential for a positive recovery.<\/p>\n Over the years, Cardano has come under some criticism for continued delays and network updates. <\/p>\n Cardano\u2019s founder, Charles Hoskinson, attributed<\/a> these setbacks to \u201cbetting on the wrong technology and being a bit ambitious with the roadmap\u201c in an interview with Cointelegraph, acknowledging that 85% of the initial roadmap had been completed.<\/p>\n Nevertheless, the network recorded an uptick in activity after the implementation of the\u00a0long-awaited scalability upgrade<\/a> Hydra, launched in the first week of May 2023. <\/p>\n The total fees paid on Cardano surged to a one-year high after the upgrade before collapsing amid the SEC\u2019s lawsuit. However, the activity has been on a consistent uptrend over the last few weeks.<\/p>\n The total ADA deposited in DeFi applications on Cardano has risen strongly, reaching two times its peak value during the bull market of 2021, per DefiLlama data. The trading volumes on Cardano decentralized exchanges has also recorded a major uptick since May\u2019s Hydra upgrade.<\/p>\n Hydra is a layer-2 scaling solution that is designed to increase the throughput and scalability of the Cardano blockchain by processing transactions on a sidechain.<\/p>\n Additionally, a Jarvis Labs report found<\/a> ADA is one of the most \u201cdecentralized L1s out there\u201d based on the Nakamoto coefficient, which measures the minimum number of entities that collectively control 33.33% of all coins staked in the network.<\/p>\n A higher degree of decentralization will act in Cardano\u2019s favor in deciding whether or not it is a security in the United States.<\/p>\n Pseudonymous analyst Kodi from Jarvis Labs wrote in the report, \u201cCardano\u2019s not dead, but very much alive, kicking, and ready to throw down in the next bull run.\u201d<\/p>\n Related: <\/em><\/strong>The best blockchain \u201cdoes not exist\u201d \u2014 Cardano Foundation exec<\/em><\/strong><\/a><\/p>\n On-chain analytics firm Santiment recorded<\/a>\u00a0a \u201chigh amount of sales at lower prices\u201d in the first week of July as prices rebounded toward the $0.30 resistance level.<\/p>\n Santiment analysts added that the levels of profit-booking exhibited oversold conditions, \u201cmaking the chances of bounces increase.\u201d<\/p>\n The funding rate data for perpetual swap contracts from CoinGlass shows that most traders held short positions on ADA, betting on a downturn after the regulatory crackdown. The massive sell-offs and negative sentiment can give rise to a contrarian price rally in the short to medium term.<\/p>\n Technically, The ADA\/USD pair has formed higher lows after bottoming at around $0.21 in June, suggesting that buyers are scooping the token on dips. A confirmation of the positive trend will come if buyers are able to flip the horizontal resistance level at $0.30 into support.<\/p>\n The ADA\/BTC pair shows signs of a potential bottom, as its weekly relative strength index indicator fell into oversold territory and the pair tested the long-term support and resistance level of 0.00000956 Bitcoin (BTC<\/a>).<\/p>\n If buyers are successful, the pair looks primed for a 60% price surge toward 0.00001548 BTC support.<\/p>\n ADA has been facing headwinds due to the SEC\u2019s lawsuit, delistings from U.S.-based trading apps and negative sentiment, but there are signs that the network is still making progress. If the technicals continue to improve, supported by on-chain growth, ADA could be poised for a positive recovery in the future.<\/p>\nCardano\u2019s DeFi ecosystem is blooming <\/h2>\n
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ADA price analysis<\/h2>\n
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