Cardano (ADA), the smart contract platform, has been facing a rough patch recently. While the broader DeFi sector has seen an uptick in DEX volumes, Cardano’s Total Value Locked (TVL) has plummeted, raising concerns in regards to the health of its ecosystem.
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DeFi Activity And NFT Market Slump
Despite the surge in DEX volumes across the crypto landscape, Cardano’s TVL has witnessed a major decline, dropping from $430 million to $230 million, in accordance with data from Artemis, a number one blockchain data provider. This implies a scarcity of interest in dApps built on the Cardano network, potentially hindering its long-term growth prospects.
The NFT space on Cardano has also taken successful. Popular NFT collections have seen a dramatic decrease in floor price and overall trading volume over the past month. This waning interest in Cardano NFTs could further dampen investor sentiment and negatively impact the value of ADA.
Source: Artemis
Cardano: Technical Indicators Flash Warning Signs
The technical outlook for ADA is currently bearish. The worth has been trending downwards over the past few weeks, forming multiple lower lows and lower highs. Moreover, key technical indicators just like the RSI (Relative Strength Index) and CMF (Chaikin Money Flow) are pointing towards declining bullish momentum and money flow into ADA.
ADA sentiment. Source: CoinCodex
Beyond the immediate price and DeFi woes, other aspects raise concerns about Cardano’s future. The rate of ADA, indicating the frequency of token exchange, has fallen significantly, suggesting decreased trading activity. Moreover, the MVRV ratio, a measure of profitability for token holders, has also dropped, implying that the majority ADA addresses are currently underwater.
Cardano Price Forecast
While Cardano stays a outstanding player within the blockchain space, the recent developments highlight the challenges it faces. The mix of declining price, waning DeFi and NFT activity, and negative on-chain metrics suggests a possible for further downside within the short term.
ADA market cap currently at $16 billion. Chart: TradingView.com
Cardano is anticipated to experience a modest increase in price, reaching $0.47 by June 30, 2024, indicating a predicted rise of nearly 5%. Nevertheless, it’s necessary to contemplate various technical indicators and market sentiment to evaluate the potential movement of the asset.
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The crypto’s bearish sentiment could also be influenced by aspects similar to market trends, news events, or technical evaluation patterns. Moreover, the Fear & Greed Index stands at 73, indicating a state of Greed amongst market participants. This implies that investors could also be more inclined to take risks or engage in speculative behavior, which could potentially impact Cardano’s price movement.
It’s noteworthy that ADA has experienced significant price fluctuations up to now. Its highest price of $3.10 was reached on September 2, 2021, marking its all-time high, while its lowest price of $0.017 was recorded on October 1, 2017, representing its all-time low. These historical price points highlight the volatility and potential for significant price swings inside the Cardano market.
Featured image from ReddSparks Crypto Blog, chart from TradingView