Cardano is showing signs of diminishing market activity and declining user interest and investor engagement, raising concerns about further drops in token price.
Formation of Bearish Pattern
The price of Cardano has decreased to $0.584 following two days of gains, reflecting broader market sentiment in the cryptocurrency sector. The current price is also showing the formation of a bearish "cup and handle" pattern, which indicates a potential continuation to the downside. The pattern's upper boundary is at $0.863, with support set at $0.519.
Signals of Continued Downtrend
An important signal appeared on June 4, when the 50-day exponential moving average (EMA) moved below the 200-day EMA, indicating a potential start of a long-term decline. The current price remains below the 200-day EMA, which now acts as a resistance line at the level of $0.703.
Decline in Transactions and Fees
The total number of monthly transactions on Cardano has dropped to 619,000, marking a yearly low. In contrast, Solana recorded over 2 billion transactions in the same period. Additionally, Cardano's chain fees fell to $146,000 over the last month, while Solana's fees exceeded $26 million. The futures market for Cardano has also cooled, with open interest falling to under $822 million, signaling lower speculative demand.
The deterioration in user activity metrics and transaction volume on the Cardano blockchain suggests a potential for further price declines, posing a risk to its market position.
