Cardano's Price Drops 10% Despite 307M ADA Staked
2min read Cardano's price has been under significant pressure this week, erasing some of the gains it made last week when it reached its monthly high. The cryptocurrency has retreated for the second consecutive day, hitting a low of $0.670, which marks a nearly 10% drop from its peak this week. Despite this decline, there are signs that Cardano is attracting more long-term investors. According to data compiled by StakingRewards, there was a net increase of 307 million ADA tokens staked on the Cardano network, valued at over $215 million. The majority of this increase occurred on April 30, when 160 million ADA tokens were staked.
This influx of staking has brought Cardano's staking ratio to 60.65%, with coins worth over $15.3 billion now staked. This ratio is notably higher than that of Ethereum, which stands at 28%, and Tron, which is at 42%. A higher staking ratio is generally seen as an indicator that investors have a longer-term outlook for the coin. Additionally, Cardano boasts other bullish metrics, such as a total value locked in the network that has surged to $394 million. Decentralized applications (dApps) like Minswap, Liqwid, Indigo, and Splash Protocol are leading this charge, and the daily decentralized exchange (DEX) volume on the chain has averaged over $4 million in recent days.
One of the main catalysts for Cardano is the upcoming Bitcoin integration, which will allow Bitcoin holders to generate returns through a secure, zero-knowledge-based approach. This integration could potentially attract more investors to the Cardano network, further boosting its staking inflows and overall value. From a technical analysis perspective, the daily chart shows that ADA has been in a downward trend over the past few months, falling from a high of $1.326 in December last year to the current level of $0.68. The coin has dropped below the 61.8% Fibonacci retracement level, a key level often associated with reversals, and has also fallen below the 50-day Exponential Moving Average. This suggests that bears are gaining control. Cardano’s ongoing retreat followed a retest of the upper boundary of its descending channel, indicating that the coin may continue to fall as bears target the lower side of the channel at $0.513, about 24% below the current level. However, a move above the channel’s upper boundary would invalidate the bearish outlook.
Despite the recent price decline, the significant increase in staking inflows suggests that long-term investors are bullish on Cardano's future. The higher staking ratio and the upcoming Bitcoin integration are positive indicators that could potentially drive the price of Cardano higher in the coming months. However, the technical analysis suggests that the coin may continue to fall in the short term as bears target the lower side of the descending channel. Investors should closely monitor these developments and consider the potential for a rebound as the network continues to attract more long-term investors.
