Renowned crypto analyst Ali Martinez has adopted a bullish outlook on Cardano (ADA) after the cryptocurrency reached his previously identified downside support target of $0.17.
This latest outlook represents a significant shift from Martinez’s previous bearish warnings, which suggested further downside potential. At that time, he pointed to declining whale holdings as a key warning sign. Specifically, the number of wallets holding between 1 million and 10 million ADA decreased from 2,370 to 2,340, indicating reduced participation and confidence among large-scale holders.
Furthermore, the analyst highlighted bearish momentum in Cardano’s MVRV ratio, which formed a death cross against its seven-day simple moving average (SMA). He also warned that the TD Sequential indicator had flashed a sell signal on ADA’s daily chart, reinforcing the bearish outlook.
Technical Shift: TD Sequential Flashes Buy Signal as ADA Targets $0.20
However, the technical landscape shifted significantly once ADA reached the $0.17 support level.
Martinez now notes that the daily TD Sequential has produced a buy signal, suggesting that the recent downward correction may be nearing exhaustion. Interestingly, his earlier bearish outlook had also relied in part on this same indicator. Therefore, this shift from a sell to a buy signal could indicate a potential reversal in ADA’s short-term trend.
With ADA reaching his $0.17 downside target, Martinez has established $0.20 as his next key price objective. Reaching this level would represent a 14.28% increase from the current $0.1750 area, signaling a potential short-term recovery.
In Martinez’s view, a move toward $0.20 could indicate that buyers are beginning to regain control of the market. So far, ADA has shown early signs of recovery following his latest forecast, climbing to around $0.1750 and gaining 1.02% over the previous 24 hours.
Nonetheless, spot trading volume declined by 15.39% to $168.85 million, suggesting that the recovery has yet to attract stronger spot-market participation and broader investor interest.
Cardano DeFi Activity Shows Signs of Recovery
Meanwhile, activity across Cardano’s decentralized finance (DeFi) ecosystem has provided some encouraging signals of renewed engagement.
On-chain decentralized exchange (DEX) volume reached $90 million over the past 30 days, representing a substantial 37.5% increase from the previous period, according to DeFiLlama data. Additionally, derivatives and perpetual trading activity has strengthened, reaching approximately $131.5 million.
However, not every Cardano metric points to a recovery. Cardano’s total value locked (TVL) has continued to decline, falling to $65.1 million. This figure stands significantly below the network’s 13-month peak of $437.2 million recorded in August 2025. Specifically, Cardano’s TVL has dropped by approximately 85% from that previous high, according to data from DeFiLlama.
Therefore, while improving trading activity and the latest TD Sequential buy signal offer some optimism, the sharp decline in TVL remains a key challenge for ADA and its broader DeFi ecosystem, which investors should monitor closely.