Since March 20, Cardano has been hovering in the $0.61 to $0.64 range, showing signs of consolidation. However, it has lagged behind other cryptocurrencies like Solana and Avalanche, which have experienced significant price gains. The prevailing bearish sentiment in the market has been reflected in the lackluster performance of ADA.
While Solana has been receiving praise for its performance in the defi sector, particularly surpassing Ethereum in trading volumes, Cardano’s smart contract ecosystem has faced a decline. Data from DefiLlama shows that Cardano’s total value locked (TVL) has dropped from $520 million on March 14 to $409.9 million on March 22, a significant decrease compared to the growth seen in Solana’s defi TVL.
The substantial decline in defi participation on Cardano’s network indicates a bearish outlook for ADA. The lack of demand for defi services on the network has led to ADA losing ground to other networks like Solana and Layer-2 solutions such as Arbitrum and Optimism. This decline in defi traction has contributed to ADA’s current price pullback.
Data from Santiment shows that open interest in ADA derivatives markets has declined by $500 million over the past month. This decrease in open interest suggests that traders are anticipating a bearish trend. With limited opportunities for profit due to stagnant price action, traders may continue to liquidate positions, further driving down ADA’s price.
ADA’s price is currently at $0.61, down 13% weekly. The lower Bollinger band indicates a support level at $0.60, but if traders continue to close positions, the price could drop below this level and head towards $0.55. To see a positive trend, ADA bulls will need to push the price above the 20-day Simple Moving Average of $0.70.
Overall, the current data and trends suggest a bearish outlook for Cardano’s price in the coming weeks. The lack of defi traction, declining open interest in derivatives markets, and overall market sentiment point towards a potential downward trend for ADA. Traders and investors should carefully monitor these indicators and adjust their strategies accordingly to navigate the challenging market conditions facing Cardano.
Leave a Reply