Published: May 1, 2024, 11:33 UTC
Key Points:
- Cardano’s price tumbled below $0.43 on May 1, after closing April with 35% decline and shedding $7 billion from it market cap in the process.
- Investors have withdraw over 119 million ADA from Cardano-native DeFi protocols in the last 60-days.
- Technical indicators shows signs of a potential breakdown below $0.30 if certain bearish conditions are met.
In this article:
Cardano price tumbled below $0.43 on May 1, after closing April with $7 billion market cap losses, on-chain metrics and technical indicators shows signs that ADA could potential breakdown below $0.30 if certain bearish conditions are met.
Cardano price Closes April 2024 with 35% Losses
In April 2024, Cardano’s price action was significantly volatile. As crypto investors took a cautious stance in the wake of Bitcoin’s halving, demand progressively dried up for mega-cap altcoins, including ADA, SOL, and ETH.
Earlier this week, the Cardano team announced plans for a hardfork that would enhance the proliferation of P2P transactions on the network, sparking rumors of a potential rally.
Cardano DeFi Ecosystem Users Withdraw 119M ADA in 60-days
Failure of the Ouroboros Genesis rollout to generate demand for ADA this week, signals the presence of a stronger fundamental bearish catalyst. Looking at the underlying on-chain data, Cardano’s DeFi ecosystems appear to be the key driver behind the recent negative price action.
The DeFiLlama TVL chart below monitors real-time swings in the number of ADA coins locked up within Cardano-native DeFi protocols.
Typically, a prolonged decline in TVL intensifies bearish pressure on the native coin price for two key reasons.
Firslty, when coins are locked in DeFi protocols, it temporarily reduces the short-term market supply. Hence drop-off in demand for ADA within decentralized finance protocols could lead to increased selling pressure on the native coin as investors seek alternative assets.
More so, the decrease in TVL suggests reduced liquidity and activity within the Cardano DeFi ecosystem, potentially signaling waning investor confidence.
Cardano Price Forecast: Bears Eyeing $0.30 Target
Valued at today’s Cardano prices, the 119.2 million ADA pulled from DeFi smart-contracts has added approximately $50 million to the short-term market supply. If it persists Cardano price could drop as low as $0.30 in the coming weeks.
However, IntoTheBlock’s global in/out of the money metric highlights that a looming sell-wall at $0.40 could Cardano bulls a life-line in the near-term.
However, if the bulls fail to stage a rebound from the $0.40 support, ADA could enter a free fall toward $0.30 as predicted.
On the flip side, Cardano’s price trajectory could flip positive again if the bulls manage to trigger a decisive rebound above $0.50.
About the Author
Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.
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