Cardano (ADA) price decline today – InvestX
Cardano, a cryptocurrency blockchain, is facing a substantial decrease in user activity and liquidity in recent data reports. The number of daily active addresses on the network has plummeted by more than 70% since early March, now standing at less than 20,000. The decline in daily transactions follows a similar trend, dropping over 71% during the same period. Additionally, the Total Value Locked (TVL) on Cardano has also experienced a significant decrease, falling from $529.8 million to $317.9 million from March 3 to March 31, representing a 13% decline.
The reduction in user engagement and liquidity appears to be correlated with a drop in ADA’s price, the native cryptocurrency of the Cardano network. Furthermore, the derivatives market for Cardano is showing bearish signals that are contributing to ADA’s price decline. Funding rates in the derivatives market have been consistently negative for the past four weeks, indicating a prevalence of bearish positions. Open interest on perpetual futures contracts has been below $1 billion since March 4, far from the peak of $1.5 billion observed on January 18. Assets with declining Open Interest (OI) historically struggle to sustain upward momentum due to a lack of capital and enthusiasm, suggesting ADA may continue to face losses without renewed interest from traders.
Technically, Cardano remains entrenched in a downtrend after experiencing resistance in early March. The price of ADA has been oscillating between the 50 and 200-day moving averages, with attempts at recovery consistently thwarted by the 50-day moving average at $0.7531. ADA recently dropped below the 200-day moving average at $0.7262, turning it into a resistance level. If the price falls below the psychological threshold of $0.60, the next support levels to monitor are around $0.5794 and $0.5197.
Despite Cardano’s ambitious project goals, the current price trend indicates a challenging reality for the cryptocurrency. The combination of reduced network activity, negative signals in the derivatives market, and technical vulnerabilities in ADA’s price structure create cause for concern among investors. It is essential for investors to approach this volatile situation with caution to navigate potential risks effectively.
