Cardano price has not been left behind in the ongoing cryptocurrency meltdown. ADA plunged to a low of $0.32, which was much lower than the all-time high of over $3. With a market cap of $11 billion, it means that its valuation has plunged by almost $80 billion in the past few months. So, is ADA a good investment or is it a value trap?
The rise and fall of Cardano
Cardano is a leading blockchain network that grew incredibly popular in 2021. It was launched by Charles Hoskinson, a co-founder of Ethereum.
Cardano became popular as investors sought for cleaner alternatives to Ethereum, which used a proof-of-work (PoW) mechanism at the time. It was also billed as a faster alternative to Cardano since it can hande thousands of transactions per second (tps).
However, at the time, Cardano did not have an ecosystem since it did not have smart contract capabilities. This changed in August 2021 when the developers launched the Alonzo hard fork.
Since then, thousands of developers have embraced Cardano. However, it is struggling in Decentralised Finance (DeFi), which is one of the top use cases for blockchain networks. It has a total value locked (TVL) of about $70 million, making it the 34th biggest chain in the world.
It is even smaller than relatively unknown projects like Ultron, Canto, and Velas. At the same time, key DeFi apps in its ecosystem have struggled to compete with the likes of Uniswap, Maker, and Aave.
It is, nonetheless, finding some success in the NFT industry. Data compiled by CryptoSlam shows that the total volume of NFTs traded in the network has been growing. In the past 24 hours, it has handled over $237k NFTs. Similarly, in the past 30 days, it has handled NFTs worth over $25 million. However, as shown below, the volume has been dropping.
Cardano price prediction
The renko chart above shows that the Cardano price has been in a strong bearish trend in the past few months. In this period, the coin has moved below all moving averages. It has also moved below the important support level at $0.3341, the lowest point on October 23.
Cardano’s awesome oscillator has moved below the neutral level. Therefore, the path of the least resistance for the coin is lower. As such, at this moment, it is a bit risky to buy Cardano will continue falling as sellers target the key support at $0.300.