A large part of the crypto community has lost confidence in Cardano (ADA). The coin has underperformed and is not yet showing any signs of strength. In addition, ADA has started to fall sharply today and this does not look like it will be over any time soon.
ADA’s price is at the same point as a year ago
The price of Cardano has already fallen by more than 4% in less than 15 hours today. At the time of writing, ADA is worth $0.73, putting the price at exactly the same point as in February 2024.
Cardano’s price seemed promising when, like other cryptocurrencies, the coin began to rise sharply in November. The currency rallied 245% to a price of $1.32 in the month of November. The last time ADA rose so sharply in a month was in February 2021.
Despite the impressive price rally in November, the currency has not performed well. Although bitcoin (BTC) and many other cryptocurrencies reached new all-time highs in 2024 and at the beginning of this year, Cardano has lagged behind. The currency has not even come close to the record of $3 during the bull market in 2021. In addition, ADA has fallen by more than 39% again in the past three months.
The reason behind ADA’s decline
Cardano’s network activity is steadily declining, resulting in less demand for ADA. According to data from DefiLlama, the trading volume peaked on December 3, 2024, at $31.3 million and has since fallen by more than 91% to $2.8 million.
Cardano’s total value locked (TVL) also reflects the decline in network activity. TVL is the value of the total number of coins locked on the blockchain and can therefore be an indication of the popularity of the network in question. Cardano’s TVL has almost halved since the beginning of December.
Cardano’s trading volume and TVL have simultaneously declined with the drop in price. In addition, the number of active Cardano addresses has also fallen by more than 70% in the past three months.
Possibly more decline ahead for Cardano
Cardano’s price charts indicate a possible further drop in price. Technical indicators that are often used to analyze the direction of price movements are showing weakness.
One of these indicators is the relative strength index (RSI), an indicator used to measure the strength of price movements, or the momentum of a currency. The RSI shows a bearish (negative) sign on the daily chart of ADA. The lines have crossed each other downward and are below the center line of 50.
