Cardano Price Plummets 81% From 2021 High Amidst Low Network Activity

Cardano, a highly controversial cryptocurrency, has sparked mixed opinions within the industry. Proponents of Cardano (ADA) argue that it represents the future of cryptocurrency due to its fast speeds, low transaction costs, decentralization, and the fact that it is the only peer-reviewed crypto project. However, critics contend that Cardano is an overvalued ghost chain, with a market cap exceeding $20 billion despite minimal network activity. This raises the question: is Cardano a good investment today?

Historically, Cardano has not delivered strong returns compared to other major cryptocurrencies. Its price has plummeted from an all-time high of $3.15 in 2021 to $0.60 today, resulting in a loss of over $70 billion in market capitalization from a peak above $90 billion. In contrast, Binance Coin (BNB) and Solana (SOL) have seen significant gains, with BNB increasing by 2,930% and SOL by 4,636% over the last five years. This underperformance can be attributed to a lack of developer and investor engagement. Cardano currently has just 49 DeFi developers and a total value locked of approximately $348 million. In comparison, Solana has 232 dApps and a TVL of over $20 billion, while BSC has 904 applications and a TVL of $8.4 billion. Many Cardano applications show little user activity, with decentralized exchange protocols on Cardano recording just $98 million in volume over the past 30 days, far below BSC’s $178 billion and Solana’s $61 billion over the same period.

Despite these challenges, Cardano is actively working to grow its ecosystem. Developers are building Midnight, a privacy-focused sidechain that leverages zero-knowledge proofs. Midnight will introduce two native tokens, NIGHT and DUST, with a Glacier airdrop expected soon. ADA holders will be eligible to receive NIGHT tokens. Additionally, Cardano is preparing to deploy the Leios upgrade, a major protocol enhancement designed to boost throughput through parallel processing. If successful, this upgrade could increase transaction speeds from around 40 TPS to 1,500 TPS. However, it remains too early to tell whether the Ouroboros Leios upgrade will drive meaningful adoption in verticals like gaming or decentralized finance.

Technical analysis suggests that the Cardano price has formed an inverse cup-and-handle pattern, a popular bearish continuation sign. It is now in the formation of the handle section. Additionally, Cardano has formed a death cross pattern, a popular bearish continuation pattern. A death cross forms when the 50-day and 200-day moving averages cross each other. Therefore, the coin is likely to experience a strong bearish breakdown in the coming weeks, with the next target at 0.321, representing a decline of over 47% from the current level. This means that Cardano is not a suitable investment at this time.