Cardano’s price has been consolidating in the range of $0.61 to $0.64 since March 20, with indicators pointing towards a potential bearish reversal. While other cryptocurrencies like Solana and Avalanche have seen double-digit price gains, Cardano has lagged behind. On-chain data trends reveal a lack of defi activity on the Cardano network, with its smart contract ecosystem declining.
Bearish Sentiment and Decline in Open Interest
The decrease in total value locked (TVL) on the Cardano network from $520 million to $409.9 million over the past week signals a bearish outlook for the ADA token. The decline in defi participation suggests a decrease in demand for defi services, impacting the market share of ADA compared to competitors like Solana. Additionally, open interest in ADA derivatives markets has dropped by $500 million in the last month, indicating bearish sentiment among traders.
Price Projection and Technical Analysis
With speculative traders leaning towards a bearish stance and defi demand on the decline, Cardano’s price could potentially drop towards $0.50 by the end of March 2024. Currently, ADA is trading at $0.61, down 13% weekly, with a significant support level at $0.60. If traders continue to liquidate positions, the price may fall below $0.60 and head towards $0.55 in the near future. To see a positive reversal, ADA bulls will need to push the price above the 20-day Simple Moving Average of $0.70.
Cardano is facing challenges in the defi sector, with declining participation and bearish sentiment among traders. The lack of activity in the smart contract ecosystem and the decrease in open interest are contributing to the downward pressure on ADA’s price. Speculative traders are expecting a further drop in price, which could see ADA testing key support levels in the upcoming weeks. It remains to be seen whether Cardano can regain momentum and reverse the current bearish trend.
