Cardano price crashed below the important support at $0.4045 last week as cryptocurrencies recoiled. ADA dropped to a low of $0.3304, which was about 88% below its all-time high. Like other cryptocurrencies, Cardano’s market cap dropped from over $90 billion to $12 billion, making it the 8th biggest cryptocurrency in the world.
Cardano price has been in a bearish trend this year amid a prolonged cryptocurrency winter. The decline happened as investors reacted to the ongoing change of monetary policy and overall low volume in the network.
The Federal Reserve has hiked interest rates by 300 basis points and analysts expect another 125 basis point hikes later this year. Historically, risky financial assets like cryptocurrencies and stocks tend to underperform in periods of high-interest rates. Indeed, the most popular American indices like the Dow Jones and Nasdaq 100 have moved to a bear market this year.
Meanwhile, Cardano’s total value locked (TVL) in DeFi has crashed from an all-time high of $420 million to about $78 million. This decline happened as the number of DeFi apps in its ecosystems rose. The biggest DeFi apps in Cardano are MinSwap, Meld, SundaeSwap, WingRiders, and MuesliSwap among others.
On the positive side, Cardano’s NFT trading volume has risen in the past few days. On Sunday, the volume of Cardano NFTs traded was over A2.7 million. At the current exchange rate, that volume was equivalent to about $884,000, which is a good number. The number of NFTs traded in its chain was about 7,474. In the past 30 days, the total volume rose by more than 108% to over A$42.1 million.
The daily chart shows that ADA price has been in a steep sell-off in the past few months. As it dropped, it moved below the important support level at $0.4045, which was the lowest level on July 13. The coin crashed below the 50-day moving averages while the Relative Strength Index (RSI) tilted above the neutral level.
Therefore, the outlook is still bearish, with the next key support level to watch is at $0.300 A move above the resistance at $0.4045 will invalidate the bearish view. Subscribe to our excellent S&R indicator for an up-to-date Cardano prediction.
This post was last modified on Oct 24, 2022, 05:22 BST 05:22