Cardano's ADA Surges 8% Amid 71% ETF Approval Odds

Cardano’s native token, ADA, is experiencing a surge in market activity as it approaches a pivotal regulatory decision. The U.S. Securities and Exchange Commission (SEC) is set to rule on Grayscale’s spot Cardano ETF application on May 29, which has sparked heightened trading and on-chain metrics indicating renewed interest in the blockchain.

The odds of an ADA ETF approval have surged to 71% on Polymarket, reflecting a significant shift in market sentiment. This optimism marks a notable increase from mid-April when the chances of approval before the end of 2025 were only 37%.

According to the analyst's forecast, there’s a 75% chance the ETF will launch this year. The SEC has up to 240 days to review Grayscale’s spot ADA ETF filing, with the final deadline set for October 22. While the May 29 date represents an interim decision point, many analysts believe a delay is more likely than an outright approval or rejection at this stage.

The prospect of institutional investment through an ETF has driven market activity, with ADA price rising approximately 5% over the past week and 8% since the start of May. Daily transactions on the Cardano network have seen a marked increase, climbing from under 30,000 at the beginning of May to a current level of 50,000. This growth in network usage coincides with the increasing anticipation surrounding the ETF decision.

Transaction volumes have also shown strength, reaching $684.6 million in a 24-hour period. This metric suggests active usage of the network beyond mere speculative trading. Adding to the bullish sentiment, data from Cardano Feed indicates that $680 million worth of ADA tokens have left exchanges. This movement of tokens to private wallets typically signals investor intention to hold rather than sell in the near term.

ADA is currently trading at $0.7524, maintaining its position above the 100-week moving average, which serves as a key long-term support level. The RSI stands at a neutral 51, while MACD and momentum indicators show slight bearish pressure in the short term.

Despite the positive price action and increasing transaction counts, Cardano faces challenges in its ecosystem development. The network currently supports only 48 DeFi applications and holds $443 million in total value locked, with just $31 million in stablecoins circulating on the platform. These figures place Cardano behind newer blockchain networks in terms of DeFi adoption and usage. This ecosystem underperformance represents a potential hurdle for long-term growth.

However, Cardano is reportedly outpacing Ethereum and Solana in core developer activity, which could signal future improvements to the platform’s capabilities and features. Technical analysts remain optimistic about ADA’s price prospects. If the current momentum holds, the price could retest last year’s high of $1.207. A breakthrough above that level might open the path to $2, with some analysts suggesting even higher targets based on historical patterns.

The May 29 SEC decision represents a major catalyst for ADA’s next move. An approval from the SEC could open the door to institutional investment and potentially send ADA above the $0.84 resistance level, potentially initiating a fresh rally. The next 24 hours will be crucial for Cardano as traders await the SEC’s verdict on the ETF application, which could set the tone for ADA’s price action in the coming months.