Cardano Price Shows Increased Pessimism as Altcoins Recover

Cardano has surged after bottoming at $0.3174 earlier this month.

Cardano (ADA) has recovered 40% from its lowest point this month, but remains 45% below its highest point this year. Despite being one of the largest cryptocurrencies, Cardano has faced intense pressure in recent months, with its market cap falling from over $90 billion in 2021 to $15.9 billion on Wednesday.

External data indicates that interest in Cardano among developers and investors has been declining recently. According to DeFi Llama, the number of monthly developer commitments dropped from 3,380 in May to 3,300 in June, and currently stands at less than 2,000 this month.

Additionally, the amount of money locked in Cardano’s DeFi applications has decreased from an all-time high of 633 million ADA in December 2023 to 538 million ADA on Wednesday. TVL of $247 million It is much smaller compared to newer blockchains like Base, Blast, Sui, Mode, and Aptos.

Unlike Solana, BNB Chain, and ethereum, Cardano doesn’t have a major meme coin or decentralized exchange (DEX). Minswap, its largest DEX, handled less than $1 million in transactions in the past 24 hours, while Solana’s Raydium processed $851 million.

Cardano also has limited market share in the declining nft market, as handled $1.6 million worth of sales in the past 30 days. The number of Cardano addresses has dropped to less than 30,000 and the amount of stablecoins is less than $20 million.

Cardano sentiment is waning

Sentiment among traders has been falling recently. Cardano’s daily volume has remained below $500 million since July 5. In contrast, smaller meme coins like Pepe and Dogwifhat handle over $700 million daily. The same trend is seen in the futures market.

Data from Santiment shows that interest among traders has fallen to the lowest level in months. Most traders are primarily concerned about the coin's poor performance and lack of developer activity.

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Cardano also has one of the lowest staking yields on the market. StakingRewards data shows that it has a participation performance less than 3%.

Technically, Cardano remains below the 200-day moving average, suggesting that the ongoing recovery may be short-lived.

On a positive note, the cryptocurrency fear and greed index is on the verge of flashing green as hopes of a rate cut by the Federal Reserve rise. Therefore, ADA price is likely to surge if bitcoin sustains its rally and crosses the year-to-date high of $73,400.