Cardano (ADA), a leading layer-1 blockchain network, is currently going through a tough period with a significant drop in market value and a decrease in rank among cryptocurrencies. Recently, ADA fell to the tenth position in terms of market capitalization after experiencing a sharp price decline.

Over the past month, the price of ADA has dropped by 28 percent, and has recorded a decrease of nearly 22 percent since the beginning of the year, according to reports from CoinMarketCap. This decline reflects a broader trend in the crypto market but highlights specific challenges faced by Cardano.

Profitability Comparison of Cardano (ADA) with Other Cryptocurrencies

Coin Edition reported that recent insights from IntoTheBlock indicate that only about 35 percent of Cardano (ADA) holders are currently in a profitable position.

This figure stands out significantly compared to the profit rates of other major cryptocurrencies, such as Bitcoin (BTC) and Ethereum (ETH), where 86 percent and 81 percent of holders, respectively, see profits.

The difference has raised concerns about the demand and attractiveness of Cardano, especially as more investors face losses. ADA's market performance also affects its position in comparison to other cryptocurrencies. Over the past month, ADA has been surpassed in market value by Dogecoin (DOGE) and Toncoin (TON).

Furthermore, the average unrealized losses on the network have widened to 15.71 percent, meaning that if ADA holders were to sell their assets at the current market price, they would face an average loss of 15.71 percent. This metric emphasizes the loss of value and investor confidence in the asset.

Decline in On-Chain Activity

The decline in ADA's market value has been exacerbated by a significant drop in on-chain activity. Data from Santiment shows that daily active addresses on the Cardano network have decreased from over 70,000 at its peak to around 30,000 currently.

This decrease in active addresses is a clear indicator of reduced engagement and transaction volume, which can further impact the network's vitality and appeal to new users.

Despite these challenges, it is important to consider the cyclical nature of crypto and the potential for ADA's recovery. Historical trends indicate that ADA may enter a super cycle in 2025, potentially reaching new highs. These projections are based on patterns observed after significant events in the crypto space, such as Bitcoin's halving in 2020.

However, current investor sentiment towards ADA is still lukewarm. Analysis from Santiment reveals that large-scale holders, or whales, have been net sellers, consistently reducing their holdings in recent months. This trend suggests a lack of substantial buying interest even as prices fall, raising questions about large investors' long-term commitment to the network.

ADA/USD Price Action

Focusing on the ADA/USD price action, the 4-hour chart reflects a prevailing bearish sentiment. After reaching a crucial price level on April 12, ADA experienced a sharp decline of 32.15 percent.

Currently, the price is trading around the Fibonacci retracement level of 38.20 percent. If ADA can close above this level, it may indicate a potential reversal of fortune, potentially pushing it towards the 50 percent Fibonacci level and above existing resistance levels.

Conversely, if ADA continues to move lower and closes below the 38.20 percent Fibonacci level, it could signal further declines. Such a move may see it retesting lower supports.

A decisive breakthrough below this support could lead to further downward momentum, aligning with bearish targets.