Cardano Price Plummets: A Deeper Dive into the Bear Market
The Cardano price has taken a significant hit, falling over 24% after reaching a high annual high. This downturn is not only reflected in the token’s price but also in the overall health of its DeFi ecosystem. Technical data and market trends suggest that the woes of Cardano may not be ending soon, with several key metrics indicating further disadvantages.
A closer look at the daily chart reveals that the Cardano price has formed a head and shoulder pattern, along with a rising wedge. These patterns are typically bearish and suggest that the price may continue to decline. Furthermore, the total value locked in Cardano’s DeFi ecosystem has dropped significantly in recent weeks, reaching a low of $320 million. This is substantially lower than its peak of $680 million, indicating a lack of confidence in the ecosystem.
DeFi Ecosystem Struggles
The DeFi ecosystem of Cardano has failed to impress, with no major new applications launching this year. The existing platforms, such as Liqwid, Minswap, and Indigo, have not been able to attract significant attention or investment. Additionally, the stablecoin supply on the network has crashed, dropping by 4.4% to $37 million in the past seven days. This is significantly lower than other newer blockchains, such as Unicain, Linea, and Plasma.
The decentralized exchange ecosystem on Cardano has also been quiet, with the volume of transactions continuing to decline. In the last 24 hours, these Dex networks have only completed $1.4 million in transactions. This lack of activity is a cause for concern and suggests that the ecosystem is not attracting the level of investment and interest that it needs to thrive.
Technical Analysis
A technical analysis of the Cardano price suggests that further disadvantages are likely in the coming weeks. The price has already moved under the lower side of the rising wedge pattern, indicating another downside. The head and shoulder pattern has also been broken, with the price crashing under the neckline. The ADA price has dropped under the 50-day and 100-day exponential moving average values, a sign that the bears are in control.
ADA price diagram | Source: crypto.new
The average direction index has shifted to 22, which indicates that the downward trend is intensifying. These patterns suggest a potential disadvantage that may reach the June low of $0.5095, which is about 35% below the current level. With institutional demand for Cardano also appearing to be low, with only Grayscale applying for a spot ADA ETF, the outlook for the token remains bearish.
In conclusion, the Cardano price is at risk of a deeper dive, with key DeFi metrics crashing and technical analysis suggesting further disadvantages. As the ecosystem continues to struggle, it remains to be seen whether Cardano can recover and regain its footing in the market. For more information and updates on the Cardano price, visit https://crypto.news/cardano-price-at-risk-of-a-deeper-dive-as-key-defi-metrics-crash/
