- •Cardano's DeFi ecosystem faces a significant slowdown, with TVL dropping 53% from its 2023 peak.
- •The stablecoin supply on Cardano has fallen 4.4% in just one week, signaling reduced network activity.
- •Cardano's lack of new institutional interest and low DEX trading volume highlight ongoing market challenges.
Cardano's (ADA) price has fallen sharply, dipping to $0.7736, its lowest level since August 12. The drop is part of a broader market decline affecting most altcoins like Ethereum and Solana. However, Cardano's unique challenges in the decentralized finance (DeFi) sector and its inability to attract significant new applications are adding pressure to its price action.
A significant contributor to Cardano's current downturn is the underperformance of its DeFi ecosystem. Total value locked (TVL) in the ecosystem has decreased drastically, falling from $680 million to just $320 million, reflecting a notable decline in interest and activity. Additionally, Cardano has not seen the introduction of major new DeFi platforms this year. Its most well‑known projects, including Liqwid, Minswap, and Indigo, have failed to drive significant growth.
Declining Stablecoin Supply
The situation is worsened by Cardano’s lack of benefit from the GENIUS Act, which is aimed at supporting stablecoin adoption. Over the last week, Cardano’s stablecoin supply dropped by 4.4%, bringing it down to just $37 million. This represents a sharp contrast to newer blockchains like Unichain, Linea, and Plasma, which have managed to capture more stablecoin supply, further eroding Cardano’s competitive position.
Cardano’s decentralized exchange (DEX) market has also gone quiet. Recent data shows that the combined trading volume across its DEXs has fallen to just $1.4 million in the last 24 hours. Furthermore, institutional interest appears limited, as evidenced by the fact that Grayscale is the only major firm to have filed for a Cardano spot ETF. Other coins like Solana and Ripple have attracted numerous ETF applications, pointing to a relative lack of institutional confidence in Cardano.
Bearish Technical Patterns
Technical analysis on Cardano's price chart reveals concerning signals. It has formed both a head‑and‑shoulders and a rising wedge pattern, both of which point to a bearish outlook. ADA has broken below the neckline of the head‑and‑shoulders pattern, and the price is trading below the 50‑day and 100‑day Exponential Moving Averages. These indicators confirm that the bearish trend is gaining momentum, with further downside likely in the near future.
If Cardano continues to follow these bearish patterns, the price could see a further decline, potentially testing the June low of $0.5095. This would represent a drop of nearly 35% from its current level. In conclusion, Cardano’s struggle to revive its DeFi sector, coupled with bearish technical indicators, points to a challenging road ahead for the blockchain platform.