Cardano's potential price dive, despite reaching a significant transaction landmark
Cardano Struggles With Price Despite Transaction Boost
Cardano's ADA token hung onto a tight range on Tuesday, June 3, even after smashing the 110 million transaction milestone on its layer-1 network. The coin was trading at $0.6920, down 20% from its peak in May, flirting with its lowest level since May 8.
The network's activity surge may indicate a bullish sign, yet ADA faltered. Here's why.
Cardano managed 31,000 transactions on Monday, up from 27,000 daily transactions a day earlier, hinting at a more active network. Separate data from Santiment reveals the number of Cardano holders shot up to 4.49 million from 4.46 million in May and 4.4 million in January. To top it off, the daily active address count soared over 60,000 in May before tapering to over 30,000 recently, suggesting growing user interest ahead of the NIGHT and DUSK airdrops.
However, the competition doesn't falter. Whereas Cardano just breached the 110 million transaction level, the recently launched Unichain has already handled 73.4 million, while Berachain, another new entrant, has processed 117 million transactions in the last 12 months.
Moreover, DEX protocols on Cardano's network processed over $109.3 million in the past 30 days, compared to Unichain's $12 billion and Sonic's $3.9 billion during the same period.
Factors Strangling Cardano's Growth
- Missing Trigger Points: Cardano's lack of significant price-boosting catalysts may hamstring its growth. Though it boasts technological advancements and ties, it hasn't seen a meaningful price increase, largely because it lacks a clear price booster like some other cryptocurrencies[5].
- Market Mood and Giants: The broader cryptocurrency market's mood, including larger blockchains such as Solana and XRP, have hindered Cardano's progress. These dominant chains often overshadow Cardano in terms of market cap and ecosystem activity[1].
- Weak DeFi Ecosystem: Cardano's DeFi's sector Total Value Locked (TVL) has significantly decreased, indicating low demand and adoption in its DeFi ecosystem, negatively impacting the coin's price[1].
- Regulatory Uncertainty: The recent extension of the review period for Grayscale's ADA ETF filing and concerns about impending regulatory outcomes may weaken investor confidence, contributing to the price slide[1].
- Technical Factors: A recent short-lived Golden Cross in Cardano may lead to a Death Cross, signaling potential further price drops. This technical indicator suggests near-term price challenges[2].
Yet, positive factors such as increased whale accumulation and solid fundamentals may aid Cardano in a long-term recovery[4].
- The ADA token's struggle with price could be due to the absence of significant price-boosting catalysts, as Cardano lacks a clear price booster like some other cryptocurrencies.
- The broader cryptocurrency market's mood, including larger blockchains such as Solana and XRP, have hindered Cardano's progress, with these dominant chains often overshadowing Cardano in terms of market cap and ecosystem activity.
- The weakening DeFi ecosystem on Cardano's network, as indicated by the decreased Total Value Locked (TVL), suggests low demand and adoption in the DeFi sector, negatively impacting the coin's price.
- Regulatory uncertainty, such as the extension of the review period for Grayscale's ADA ETF filing and concerns about impending regulatory outcomes, may weaken investor confidence and contribute to the price slide.
- Technical factors, such as a potential Death Cross following a short-lived Golden Cross in Cardano, may signal further price drops, indicating near-term price challenges.
Yet, positive factors like increased whale accumulation and solid fundamentals may aid Cardano in a long-term recovery.
