Cardano experienced a mixed performance in Q3, with declining user engagement and stagnant metrics. However, there are optimistic signals on the trading chart, including an upward trajectory of the Relative Strength Index (RSI) and attempts to break resistance levels. These indicators suggest the potential for an upward price movement, despite short-term volatility.
Our analysis of the situation
Cardano, the versatile blockchain network, took investors and enthusiasts on a thrilling journey in the third quarter of this year. With a mixed bag of performance, it left everyone pondering its trajectory. But fear not, because beneath the seemingly lackluster metrics lies a glimmering hope for a positive turnaround.
The Impact Of Stagnant Metrics
In the world of cryptocurrencies, metrics act as vital indicators, assessing the health and vitality of a blockchain network. Cardano's Q3 performance, as analyzed by Messari, did show some concerning trends, though not all gloomy. One encouraging sign was the 29.9% decrease in the average transaction fee on the Cardano network, dropping from $0.13 to $0.10. This suggests a reduction in the cost of network usage, which is great news for users.
However, one notable concern was the decline in the count of daily active addresses. Between July and September, the average daily active addresses took a nosedive, plunging by 29% from the previous quarter. The remaining question is whether Cardano can maintain user engagement and activity levels.
Fees denominated in ADA, Cardano's native token, also fell by 3% quarter-over-quarter (QoQ). The silver lining here is that users may have been transacting with smaller amounts of ADA due to lower fees. Nevertheless, the network's revenue showed a substantial 30% decline, raising valid concerns about its overall financial stability.
Cardano’s Chart Signals Optimism
While the metrics may have presented some challenges, Cardano's chart on TradingView tells a different tale, teasing the possibility of an upward climb. The Relative Strength Index (RSI) for Cardano is moving on an upward trajectory, inching closer to the overbought territory. Surprisingly, this might not be a typical signal for a potential pullback if we consider Cardano's recent price performance and external factors.
Adding to the optimistic outlook are the moving averages on the chart. After a period of lateral movement, the price seems determined to break above the long-term resistance trendline. Moreover, higher lows on the chart give birth to a potentially bullish scenario, indicating that Cardano may be gearing up for a significant price move.
Potential Price Direction
Presently, Cardano (ADA) is trading at $0.290817 according to CoinGecko's latest data. Over the past 24 hours, ADA experienced a small dip of 3.8%, while seeing a moderate 2.8% rise in the past week. These short-term ups and downs reflect the current volatility and uncertainty within the market.
Cardano faced its fair share of challenges in Q3 with stagnant metrics and declining user engagement. However, the positive signals on the trading chart combined with the potential for an upward momentum suggest that Cardano might be on the brink of a price breakout.
Remember, this blog post should not be mistaken as investment advice, as investing always carries risk. When you invest, remember that your capital is subject to risks.
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Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Image(s) are provided by Unsplash or other free sources. They are illustrative and may not represent the content truly.
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