Cardano’s price has been in a sharp downtrend in recent months as many investors have concerns about the project’s present and future. The native token ADA is trading at $0.87, which is slightly above its year-to-date low of $0.746. This puts the price about 72% below the all-time high of $3. In that time, the market cap has dropped from $91 billion to $28 billion.
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Is Cardano a good investment?
Cardano is one of the largest blockchains in the crypto industry. It is ranked as the 9th largest cryptocurrency by market cap in the world.
However, the coin has seen a sharp downward trend in recent months as investors remain concerned about the current ecosystem and the future of the platform.
The main concern is that the network has not achieved significant adoption among developers. For example, a quick look at DeFi Llama shows that there are only six DeFi platforms running on Cardano.
Of those six, only two – MinSwap and SundaeSwap – have a total value locked in excess of $100 million. MuesliSwap has a total value locked of about $1.49 million, while the rest have no assets tied up in the ADA ecosystem.
The same trend can be seen in other industries such as Metaverse and NFTs. While there have been several projects in the ecosystem, none has become a widespread success.
In my opinion, the only positive thing about Cardano is its popularity among investors. Millions of users around the world own ADA coins. This has helped the price to still remain quite stable. And most of these users are die-hard fans who have been on it for months.
According to Staking Rewards, one can stake Cardano with a return of 5.28%, which is higher than Ethereum. It is also worth noting that $20 billion of ADA coins are staked, while the total market cap is $28 billion.
ADA Price Forecast
The daily chart shows that the ADA price has been in a strong downtrend for the past few months. Consequently, the coin remains below the lines of the moving averages of the last 50 and 100 days. This is a sign that the bears are in total control.
A closer look shows that the Cardano price has formed a huge falling wedge pattern. This is shown in black. In price action analysis, a falling wedge is usually a bullish sign.
As the wedge approaches its peak, there is a likelihood that the Cardano price will rebound sharply in the coming months. The formation indicates that the price has bottomed out.
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First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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