The Cardano price has been under intense pressure in the past few months as investors worry about several factors. ADA is trading at $0.88, which is the lowest since February 21st, 2021. It has crashed by more than 72% from its highest level in 2021. If you had invested $10,000 in Cardano on September 3rd last year, it would now be worth about $2,800. On a broader scale, investors have lost over $63 billion.
There are multiple reasons why the Cardano price has sold off lately. First, it has declined because of the latest weakness in the cryptocurrency industry. Indeed, most coins have been in a bearish trend in the past few months. For example, Bitcoin has crashed from more than $65,000 to about $38,000 today. The same is true with Ethereum, Binance Coin, and XRP.
Second, ADA’s price has fallen because of the slower growth of its ecosystem. While many developers are now building on the platform, the growth has been slow. For example, according to DeFi Llama, there are now just five DeFi apps built on the platform. Notably, only SundaeSwap is meaningful, and it has a 98.26% dominance. In addition, it has a total value locked (TVL) of $114 million, while MuesliSwap has a TVL of just $2 million.
Finally, while many people still hold Cardano, the reality is that inflows into the network have been a bit limited. This trend will likely continue as the Federal Reserve embraces a more hawkish tone.
The daily chart shows that the ADA price has been in a deep sell-off in the past few months. The coin has managed to form a death cross pattern, which is usually a bearish signal. It has also managed to move below the key support level at $0.982, which was the lowest level in July last year,
The Smart Money Index (SMI) has also been in a downward trend in the past few months. Therefore, unless a major thing happens, there is a likelihood that the coin will continue falling. The next key target will be at $0.50, about 45% below its current level.
This post was last modified on Feb 28, 2022, 10:18 GMT 10:18