Cardano (ADA) holders have endured a rough week with declining prices. However, a glimmer of hope emerged in the DeFi (Decentralized Finance) sector, where Cardano’s Decentralized Exchange (DEX) saw daily volumes surpass 23 million ADA.
This uptick in DEX activity suggests potential growth in decentralized trading on Cardano. But despite the positive DEX volume, a contrasting narrative unfolds when looking at Cardano’s Total Value Locked (TVL). Data from Artemis reveals a concerning plunge in TVL, dropping from $430 million to $230 million. This sharp decline could be attributed to a lack of user interest in decentralized applications (dApps) built on the Cardano network.
Further dampening Cardano’s outlook is the recent slump in NFT (Non-Fungible Token) activity. According to Tap Tools, popular NFTs on Cardano have witnessed a significant drop in floor price and overall trading volume over the past month. This waning interest in Cardano’s NFT ecosystem could negatively impact the protocol’s overall health and potentially further hinder ADA’s price movement.
At the time of writing, ADA sits at $0.4489. Recent price charts reveal a bearish trend, with ADA establishing a series of lower lows and lower highs over the past few weeks. The price has been oscillating between $0.512 and $0.421, with the $0.512 resistance level being repeatedly tested. A potential price reversal looms if ADA weakens this level again.
Technical indicators also paint a concerning picture. The Relative Strength Index (RSI) for ADA has dipped considerably, signifying a fading bullish momentum. Similarly, the Chaikin Money Flow (CMF) has also taken a hit, indicating a significant decrease in money flowing into ADA.
Adding another layer of concern is ADA’s declining velocity. A falling velocity suggests a decrease in the frequency of ADA being traded, potentially signaling a drop in investor confidence.
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Overall, Cardano presents a mixed bag of signals. While DEX volume offers a glimmer of hope, the plunging TVL, declining NFT activity, and bearish technical indicators paint a less optimistic picture. Only time will tell if Cardano can weather this storm and regain investor confidence.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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