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Our analysis of the situation
Cardano (ADA), the much-touted smart contract platform, has been enduring a rather rough patch lately. Despite the DeFi sector's soaring DEX volumes, Cardano’s Total Value Locked (TVL) has experienced a noticeable dip, sparking concerns about the vitality of its ecosystem.
DeFi Activity And NFT Market Slump
Despite the overall hike in DEX volumes in the crypto sphere, Cardano’s TVL has taken a considerable hit, slipping from $430 million to $230 million, as per data from Artemis, a leading blockchain data provider. This seemingly points to a lack of enthusiasm for dApps developed on the Cardano network, potentially stunting its long-term growth potential.
Furthermore, the NFT space on Cardano has also borne the brunt of this downturn. Well-liked NFT collections have seen a substantial drop in floor prices and overall trading volume over the past month. This dwindling interest in Cardano NFTs could further dampen investor sentiment, ultimately impacting the price of ADA.
Cardano: Technical Indicators Flash Warning Signs
The technical outlook for ADA is currently casting a bearish shadow. The price has been on a downward trend for the past few weeks, forming multiple lower lows and lower highs. Key technical indicators like the RSI (Relative Strength Index) and CMF (Chaikin Money Flow) are signaling decreasing bullish momentum and money flow into ADA.
Beyond the immediate price and DeFi woes, other factors raise concerns about Cardano’s future. The velocity of ADA, indicating the frequency of token exchange, has witnessed a significant decline, suggesting reduced trading activity. Additionally, the MVRV ratio, a measure of profitability for token holders, has also dropped, hinting that most ADA addresses are currently in the red.
Cardano Price Forecast
While Cardano holds a prestigious position in the blockchain realm, the recent developments underscore the challenges it confronts. The combination of a declining price, waning DeFi and NFT activity, and negative on-chain metrics implies the potential for further downside in the short term.
Cardano is projected to witness a modest price increase, reaching $0.47 by June 30, 2024, indicating a predicted rise of nearly 5%. However, it’s crucial to factor in various technical indicators and market sentiment to gauge the potential movement of the asset.
The crypto’s bearish sentiment may be influenced by factors such as market trends, news events, or technical analysis patterns. Moreover, the Fear & Greed Index currently 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, potentially affecting Cardano’s price movement.
It’s worth noting that ADA has witnessed significant price fluctuations in the past, with its highest price of $3.10 being achieved on September 2, 2021, marking its all-time high, and its lowest price of $0.017 recorded on October 1, 2017, representing its all-time low. These historical price points highlight the volatility and potential for significant price swings within the Cardano market.
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.
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