Cardano Price Prediction: Report Recommends Dumping ADA

Cardano price has pulled back in 2023 as demand for cryptocurrencies waned after the SEC approved a spot Bitcoin ETF last week. ADA, its coin, has dropped from last month’s high of $0.681 to the current $0.52. Other coins like Injective, Solana, and Avalanche have also remained under pressure.

Cardano’s valuation issues

Even as Cardano price retreats, there are questions about Cardano’s $18 billion market cap, which makes it the 8th biggest cryptocurrency in the world. This is a concern I have shared before for years, as you can read here and here.

A report published this week by K33 recommended that investors should sell their Cardano coins because it is a ghost chain. A ghost chain is a blockchain network that has no activity going on in its ecosystem.

A closer look at Cardano and its blockchain shows that little activity is going on in there. For example, a closer look at its DeFi network shows that it has only 33 dApps in its platform that have a combined TVL of $356 million, making it the 11th biggest chain in the world.

Of these 33 networks, only 15 of them have a DeFi TVL of more than $1 million. The challenge for Cardano is that TVL is not always a good measure of a network success because there is much it does not show.

For example, Minswap is the second biggest DeFi platform in Cardano with over $18 million in TVL. However, in terms of actual trading volume, it had less than $3 million in the past 24 hours. MuesliSwap, another Cardano DEX had less than $3k in total transaction volume.

Meanwhile, looking at the total stablecoins in Cardano shows that they are less than $3 million. This is important because a chain that lacks stablecoins is a sign that it is not actively used across industries like DEX and lending.

The report also debunked the bullish case for Cardano because of its total daily transactions of over 90k. These transaction numbers mean nothing since Cardano is a popular coin that is promoted heavily by most exchanges. The report said:

“Ada is a well-established coin that is tradeable ‘everywhere’, also on smaller local exchanges, making it one of the coins that are “pushed” to aspiring crypto investors. “

Cardano price forecast

The daily chart shows that the ADA price has pulled back in the past few days. It has retreated from $0.681 in December to $0.52. The coin has retreated below the 50-day and 25-day moving averages while the Relative Strength Index (RSI) has been in a downtrend and has moved below the neutral point at 50.

Therefore, the outlook for Cardano is bearish, with the next point to watch being at $0.462. A break below that level will see it drop to the next point at $0.40, the highest swing on November 16th.

Be the first to comment

Leave a Reply

Your email address will not be published.