Cardano (ADA), the smart contract platform, has been hitting a rough patch lately. While the broader DeFi sector has seen a rise in DEX volumes, Cardano’s Total Value Locked (TVL) has plummeted, raising concerns about the health of the ecosystem.
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DeFi activity and the NFT market collapse
Despite the rise in DEX volumes in the crypto landscape, Cardano’s TVL has witnessed a significant decline, from $430 million to $230 million, according to data from Artemis, a leading blockchain data provider. This indicates a lack of interest in dApps built on the Cardano network, which could potentially hinder long-term growth prospects.
The NFT space on Cardano has also taken a hit. Popular NFT collections have seen price floors and overall trading volume drop dramatically over the past month. This waning interest in Cardano NFTs could further dampen investor sentiment and negatively impact the economy price of ADA.
Cardano: Technical indicators flash warning signals
The technical outlook for ADA is currently bearish. The price has been on a downward trend in recent weeks and has formed multiple lower lows and lower highs. Furthermore, key technical indicators such as the RSI (Relative Strength Index) and CMF (Chaikin Money Flow) point to waning bullish momentum and money flow into ADA.
Besides the immediate price and DeFi woes, other factors are raising concerns about Cardano’s future. The rate of ADA, which indicates the frequency of token exchanges, has dropped significantly, indicating that trading activity has decreased. Furthermore, the MVRV ratio, a measure of profitability for token holders, has also fallen, implying that most ADA addresses are currently underwater.
Cardano Price Prediction
While Cardano remains a prominent player in the blockchain space, recent developments highlight the challenges it faces. The combination of a falling price, declining DeFi and NFT activity, and negative on-chain metrics indicate the potential for further downside in the near term.
Cardano is expected to experience a modest price increaseand reached $0.47 on June 30, 2024, indicating a forecast increase of almost 5%. However, it is important to take into account various technical indicators and market sentiment to assess the potential movement of the asset.
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Crypto bearish sentiment can be influenced by factors such as market trends, news events, or technical analysis patterns. Furthermore, the Fear & Greed Index stands at 73, indicating a state of greed among market participants. This suggests that investors may be more inclined to take risks or engage in speculative behavior, which could potentially impact Cardano’s price movement.
It is worth noting that ADA has experienced significant price fluctuations in the past. The highest price of $3.10 was reached on September 2, 2021, which marks the all-time high, while the lowest price of $0.017 was recorded on October 1, 2017, which is the all-time low. These historical price points highlight the volatility and potential for significant price swings within the Cardano market.
Featured image from ReddSparks Crypto Blog, chart from TradingView