Cardano’s price continues to disappoint: What is happening?
Cardano, one of the top blockchain protocols, is currently facing challenging times as its price experiences a decline. Data from DeFiLlama reveals that the Total Value Locked (TVL) on Cardano has plummeted by 15% in the past month, sitting at just $324 million. This decrease in TVL indicates that the network is struggling to attract both investors and developers, as only a few dApps within the ecosystem have a TVL exceeding $10 million.
In addition to the drop in TVL, Cardano’s stablecoin supply has stagnated at $30 million in recent months, a tiny fraction compared to the stablecoin industry, valued at over $250 billion. Furthermore, some stablecoins on Cardano have lost their peg to the dollar, adding to the concerns surrounding the ecosystem.
Despite these challenges, McJared argues that these signals might not paint the entire picture, as Cardano shines in the Liquid Staking sector, showcasing unparalleled innovation in financial freedom. This sector could potentially offset some of the setbacks faced by Cardano in other areas.
To counter the stagnation, Charles Hoskinson and the Input Output team are working on new initiatives to invigorate Cardano’s ecosystem growth. Projects like Leios and Midnight aim to introduce parallel processing and zero-knowledge proofs, respectively, to enhance the network’s capabilities. However, the success of these initiatives in attracting more developers remains uncertain, especially as competing blockchains like Unichain, Sonic, Sui, and Berachain gain traction in the market.
On the technical side, Cardano’s daily chart signals a bearish momentum, with the price falling below its 20-day Moving Average (MA). However, there is a potential for a 40% increase if Bitcoin continues on an upward trajectory. Maintaining support between $0.61 and $0.65 is crucial to breaking through the $0.7 level in the short term. Moreover, Cardano shows an inverted cup pattern, indicating bearish continuation if the lower support is breached.
Despite the challenges faced by Cardano related to TVL declines, stablecoin usage, and technical patterns, there may be a silver lining as the 12H Relative Strength Index (RSI) indicates extreme oversold levels. Whether buyers will step in or favor other dominant altcoins like XRP and Solana remains to be seen.
In conclusion, Cardano’s recent struggles are evident in its price decline and ecosystem challenges. While initiatives to stimulate growth are underway, the competition from newer blockchains poses a significant threat. The future of Cardano hinges on the success of these initiatives and the response of the market in the coming months.
