- Cardano is experiencing significant market pressure, with declining developer interest and reduced DeFi activity, leading to bearish sentiment.
- Despite recent rebounds, Cardano remains significantly below its peak values and struggles to compete with newer blockchains.
NAIROBI (CoinChapter.com) — Cardano (ADA) is under intense market pressure, with data from Santiment showing its sentiment at the lowest in over a year. In stark contrast, XRP enjoys bullish sentiment, highlighting a significant difference in market perception.
Cardano’s price has mirrored this negative outlook. The cryptocurrency’s market cap has seen a dramatic fall from a peak of over $90 billion in 2021 to just $15.9 billion recently. Even though ADA rebounded by 40% from its lowest point this month, it remains 45% below its highest value this year, indicating persistent bearish sentiment.
Developer Interest Declines
The decline in sentiment is accompanied by a noticeable drop in developer and investor interest in Cardano, despite the upcoming Chang update. Currently, the network hosts 35 active projects and 3,656 public GitHub repositories. However, only 245 developers engaged with Cardano initiatives this week, marking a 20.63% decrease from the previous month. The number of commits also fell to 1,548, a 30.4% decrease over the same period.
DeFi and Staking Struggles
Adding to Cardano’s challenges is the decreasing amount of money locked in its DeFi applications. The total value locked (TVL) in Cardano’s DeFi ecosystem fell from a record high of 633 million ADA in December 2023 to 538 million ADA on July 17. With a TVL of just $243 million, Cardano trails behind newer blockchains like Base, Blast, Sui, Mode, and Aptos. This decline signals a loss of investor confidence in Cardano’s ability to compete in the DeFi space.
Cardano also lacks major meme coins or decentralized exchanges (DEXs) that drive significant traffic and engagement. For instance, Minswap, its largest DEX, handled less than $1 million in transactions in the past 24 hours. In contrast, Solana’s Raydium processed $851 million. This disparity underscores Cardano’s struggle to maintain a competitive edge.
Moreover, Cardano’s staking yield remains one of the lowest in the market, at less than 3%. According to data from StakingRewards, this low return makes Cardano less attractive to investors seeking passive income through staking.
Technical Analysis and Market Sentiment
Technically, ADA/USD is struggling. The price remains below the 200-day moving average of $0.519, suggesting the ongoing recovery may be short-lived. The Relative Strength Index (RSI) at 59.48 indicates a neutral to slightly bullish sentiment. However, for a potential trend reversal, the price needs to break above the 200-day moving average.
The daily trading volume of ADA has also remained below $500 million since July 5th. In contrast, smaller meme coins like Pepe and Dogecoin are handling over $700 million daily. This low trading volume highlights the lack of enthusiasm among traders.
Cardano faces significant challenges, from declining market sentiment and developer interest to struggles in the DeFi and staking spaces. Despite its technological advancements and updates, Cardano’s future success will depend on its ability to regain investor confidence and improve its competitive standing in the rapidly evolving cryptocurrency market.
