Weak network activity raises concerns for Cardano's price, potentially signaling a downward trend.
Looking at the present situation, it seems that Cardano, badged as ADA, is taking a tumble into a local bear market. At the last check-in on Saturday, ADA plummeted to a measly $0.668, marking a 22% drop from its May high. This makes it the coin's lowest point since May 6.
On-chain metrics are screaming you-know-what as they suggest ADA might be in for more pain. According to Santiment data, ADA's social dominance score has taken a nosedive, hitting 0.792%, compared to its May level of 1.8%. This metric reveals that fewer folks are chatting up ADA on popular social media platforms like Twitter and Reddit. Furthermore, the daily active addresses have seen a sharp decline over the past few weeks, with 21,565 addresses on Friday, a significant drop from over 60,500 in May. This points to fewer people interacting with ADA.
Additionally, the closely watched mean dollar invested age (MDIA) has taken a tumble, suggesting that old coins are on the move. The 365-day MDIA figure has plunged to a shocking -425, compared to 62 in September last year. And get this – the network realized profit/loss has slipped into the negative zone, signaling that buyers are starting to throw in the towel. Lastly, the Market Value to Realized Value or MVRV ratio has flipped into the negative, suggesting that ADA has become a tempting bargain. However, a word to the wise – the MVRV ratio of -0.019 is higher than it was in April, when ADA bounced back.
Elsewhere, the data paints a grim picture for ADA's ecosystem. The total value locked in its decentralized finance (DeFi) ecosystem has tumbled to a paltry $387 million, while the total supply of stablecoins is a mere $30 million. These figures are relatively low compared to Sonic and Unichain, both of which hit the scene earlier this year.
Now let's dive into the technical analysis. The daily chart reveals that ADA has nose-dived from $1.317 in December to its current price of $0.66. It has even breached the descending trendline that connects the highest swings since December. In its latest move, ADA formed a tiny double-top pattern at $0.845 and has since plummeted below its neckline at $0.713, which was its lowest point on May 19. To top it off, it has also slipped below the 50-day and 200-day Weighted Moving Averages, hinting that the coin is likely to keep on falling. If sellers have their way, ADA will soon strike the next key support at $0.513, marking a 23% drop from the present level.
On the flip side, some analysts and AI models believe that ADA may stage a comeback by the end of 2025. They attribute this hope to ADA's robust technological foundation and ongoing development. But keep in mind, these forecasts are far from concrete and are subject to market conditions. So buckle up, it's gonna be a wild ride!
- Despite the recent drop in ADA's price, some analysts and AI models predict a potential comeback for ADA by the end of 2025, attributing this hope to its robust technological foundation and ongoing development.
- The total value locked in Cardano's DeFi ecosystem has plummeted to $387 million, while the total supply of stablecoins is only $30 million, making these figures relatively low compared to DeFi platforms such as Sonic and Unichain.
- On-chain metrics suggest ADA might be in for more pain, as its social dominance score has plummeted, daily active addresses have declined sharply, and the mean dollar invested age (MDIA) has taken a tumble, indicating that old coins are on the move.
- The technical analysis reveals that ADA has fallen significantly, as it has breached the descending trendline that connects the highest swings since December and formed a double-top pattern, signaling a likely continued fall towards the next key support at $0.513.
