Cardano Price Risks 20% Crash As Ecosystem Crisis Continues

Cardano price has crashed into a bear market this month, as it fell by ~40% from its highest point in August. 

Cardano (ADA) token was trading at $0.6420 today, Oct. 25, and technical analysis points to at least a 20% dip in the near term. 

Cardano price technicals point to a ~20% dip

The daily timeframe chart shows that the ADA price has come under pressure in the past few months. It has moved from $1.0196 in August to $0.6330 today. 

This crash has coincided with the general weakness in the crypto market. It dropped below the critical support level at $0.6858 on Oct. 10 and then retested it. A break-and-retest is a common bearish continuation sign. 

Worse, the 50-day and 200-day moving averages are about to cross each other. Such a crossover would be a death cross, one of the riskiest patterns in technical analysis. 

The Supertrend indicator has turned red, while the Relative Strength Index and the Percentage Price Oscillator have all pointed downwards.

The Cardano price has also formed a bearish pennant pattern, consisting of a vertical line and a triangle. Therefore, all these patterns point to more downside, potentially to the year-to-date low of $0.5085. This target is about 20% below the current level.

On the flip side, a move above the 200-day EMA at $0.80 will invalidate the bearish ADA price forecast.

Cardano ecosystem woes continue

Cardano token has remained under pressure amid the ongoing woes in its ecosystem. Data compiled by DeFi Llama shows that its decentralized finance ecosystem is struggling. Its total value locked has plunged by 20% in the last 30 days to $291 million.

Most of these assets are in a handful of protocols, including Liqwid, Minswap, Indigo, and Splash Protocol. Its TVL is much lower than that of other similar layer-1 networks, such as Solana, BSC, and Sui.

Cardano’s decentralized exchange ecosystem is also struggling. Its total volume over the last 24 hours was just $1.53 million, a tiny figure compared to Ethereum and Solana, which handled over $4.17 billion and $4.10 billion, respectively, in the same period. 

Cardano is also a minor player in the growing stablecoin industry. Its stablecoin market capitalization stands at just $36 million, a tiny amount in a sector with over $300 billion in assets. 

These metrics explain why Cardano has struggled as Charles Hoskinson and his team continue building Hydra and Midnight solutions.