Cardano’s Price Plummets by 55% Due to Decline in DeFi and Lack of Bullish Factors

The price of Cardano has fallen by more than 55% since reaching its peak in November. This decline is linked to a general decrease in decentralized finance (DeFi) activity within the ecosystem, leading to record low volumes on decentralized exchanges. These worrying trends raise questions about the actual usage and investor participation in the Cardano network.

In contrast to Solana, which has seen positive momentum from exchange-traded funds (ETFs), Cardano currently lacks any immediate factors to boost its price. Even with the announcement of the Leios upgrade, investor interest in ADA remains low, contributing to its lackluster performance. One major reason for ADA’s subdued price movement is its inability to break through the resistance zone at $0.61. Without a compelling narrative to drive short-term demand, ADA struggles to surpass crucial resistance levels.

As of now, ADA is priced at $0.5828, showing a slight drop of 0.74% in the last 24 hours. Despite the decrease, the 24-hour trading volume has increased by 20.73%, reaching $624.32 million. ADA’s market capitalization is approximately $20.64 billion, reflecting a small decline of 0.76%. Technical analysis reveals that the Bollinger Bands suggest a tightening range, indicating low volatility and the potential for a breakout. However, the price remains below the 20-day simple moving average at $0.6057, acting as a key resistance level. Traders should pay close attention to resistance points at $0.613 and $0.6554, with support levels near $0.5734 and the crucial demand area at $0.5235.

The Relative Strength Index (RSI) stands at 46.98, indicating bearish sentiment below the neutral 50 mark. With weak momentum and no significant breakout above $0.61, ADA is likely to continue trading within a range. External factors such as macroeconomic and geopolitical events have influenced the overall market sentiment, impacting altcoins like Cardano, Solana, and Dogecoin.

Considering the technical indicators, Cardano’s price struggles to surpass key resistance levels, impacting its performance in the near future. The RSI has shown weakness since May, hinting at the possibility of continued selling pressure. Nevertheless, signs of exhaustion are visible above the $0.57 mark, potentially signaling a bullish divergence and a forthcoming price increase. This divergence implies that while prices have been falling, the intensity of the sell-off is diminishing, potentially setting the stage for a rebound.

Current price levels pose a critical juncture for Cardano, hovering near crucial structural levels that could either support a bullish trend or lead to further declines. Technical signals recommend caution as the price fails to demonstrate strong momentum for a break above these levels. Despite existing challenges, optimistic signs are emerging that could shift market sentiment in favor of Cardano. A bullish divergence indicates a possible rally, driven by increased DeFi activity or positive market developments. Nonetheless, overall market conditions and the performance of other altcoins will greatly influence Cardano’s future price movements. Traders and investors are advised to closely monitor key levels and technical indicators for informed decision-making.