31 May

Over the past week, Cardano (ADA) investors faced challenges with declining prices. Nevertheless, there was a noticeable increase in interest within the DeFi sector.

Condition of DeFi

The daily volume on Cardano's DEX (Decentralized Exchange) exceeded 23 million ADA.

Even with the increase in DEX volumes, Cardano's TVL (total value locked) has drastically decreased.

The TVL for Cardano dropped from $430 million to $230 million, according to Artemis statistics. The lack of interest in dApps on the Cardano network may be the reason for this fall in TVL.

The NFT trades that take place on the network could also have a negative effect on Cardano. Popular NFTs on the Cardano network have seen a sharp drop in trading volume and floor price over the past month.

A decline in interest in Cardano's ecosystem could have severe consequences for the protocol and might negatively affect ADA's price movements. Currently, ADA is trading at $0.4489. 

In recent weeks, ADA's price has shown a bearish trend with multiple lower lows and lower highs. It has been trading between $0.512 and $0.421, with the $0.512 level being tested several times. If ADA's price weakens the $0.512 level again, it could signal a potential reversal in its price trajectory. However, current indicators do not support a bullish outlook for ADA. The Relative Strength Index (RSI) for ADA has declined significantly, indicating a decrease in bullish momentum. 

Additionally, the Chaikin Money Flow (CMF) for Cardano has also fallen notably, suggesting a reduction in the money flowing into ADA.

What is the state of ADA?

The ADA's decreasing velocity is another troubling aspect. A decreasing velocity suggests that within the past several days, there has been a noticeable drop in the frequency at which ADA was being exchanged.

Additionally, the MVRV ratio for ADA had drastically decreased, suggesting that most addresses were no longer profitable.

Additionally, there had been a significant decline in the Long/Short ratio for ADA, suggesting a decline in the number of long-term addresses holding ADA.

May 2024, Cryptoniteuae

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