Cardano (ADA) has experienced a significant increase after hitting a low of $0.3174 earlier this month. However, it is crucial to note that despite this bounce back, the cryptocurrency is still 45% below its highest point this year. The decline in market cap from over $90 billion in 2021 to $15.9 billion on Wednesday has resulted in intense pressure on Cardano. External data reveals a decline in interest among developers and investors, with the number of monthly developer commits dropping from 3,380 in May to less than 2,000 this month. Additionally, the amount of money locked in Cardano’s DeFi applications has decreased significantly, from a record high in December 2023 to a mere $538 million on Wednesday.
Cardano faces tough competition from newer blockchains like Base, Blast, Sui, Mode, and Aptos, which have seen a surge in popularity. Unlike Solana, BNB Chain, and Ethereum, Cardano lacks a major meme coin or decentralized exchange (DEX). Minswap, its primary DEX, has handled less than $1 million in transactions in the past 24 hours, significantly lower than Solana’s Raydium. The dwindling market share in the NFT market, with only $1.6 million in sales in the last 30 days, further highlights Cardano’s struggles.
The decreasing number of Cardano addresses, stablecoins, and the minimal daily volume below $500 million since July 5th point to a negative trend in trading activity. Smaller meme coins like Pepe and Dogwifhat are outperforming Cardano in daily transactions, emphasizing the lack of interest among traders. Data from Santiment shows a decrease in interest among traders to the lowest level in months, primarily due to concerns regarding Cardano’s underperformance and lack of developer activity.
From a technical standpoint, Cardano remains below the 200-day moving average, indicating that the recent recovery may be short-lived. Despite this, there is a glimmer of hope as the crypto fear and greed index is on the cusp of turning green amidst expectations of a Federal Reserve rate cut. It is believed that if Bitcoin continues its rally and surpasses the year-to-date high of $73,400, ADA price could see a significant boost in the near future.
The recent performance of Cardano raises concerns about its ability to compete with other blockchains, maintain developer interest, and attract investors. With dwindling market share, declining trading activity, and technical indicators suggesting a short-lived recovery, it is essential for Cardano to address these issues to remain competitive in the cryptocurrency market.