- Cardano’s decentralized exchange (DEX) has seen its daily volume skyrocket, surpassing 23 million ADA amidst price volatility.
- Other metrics such as total value locked (TVL), ADA capital flow, and NFT trades, have plummeted, signaling a bearish outlook.
Cardano (ADA) has witnessed a massive uptick in ADA daily volume on its decentralized exchange (DEX). The increased flow could indicate heightened volatility over the coming days and weeks. The increase in flow could suggest a record exchange in selling or buying.
Recent data shows that DEX volume has skyrocketed above 23 million ADA. This rise coincides with a price drop in the last couple of days.
However, other metrics seem to suggest that the altcoin is about to undergo a bearish trend. For starters, the TVL for Cardano fell from $430 million to $230 million. This drop suggests decreasing interest in the digital asset and its inbuilt dApps on the network. Additionally, the network has witnessed a decrease in NFT sales, similar to other networks.
This recent fall in network interest could negatively impact ADA prices in the coming days and weeks.
On-chain metrics have also indicated some bearish pressure, raising concern among ADA investors. Cardano’s technical indicators suggest weakening bullish momentum. Both the RSI and CMF have declined significantly, indicating a decrease in buying pressure.
Furthermore, the MVRV ratio for ADA had fallen significantly. This simply meant that the profitability of most addresses had declined. In response, investors could double down, taking advantage of the discount prices to accumulate more tokens, or could look to cut their losses and sell in fear of greater losses.
At the time of writing, ADA is trading for $0.4493 after a correction in the last week. The altcoin has lost 3% in the last 7 days. With a $15.8 billion market cap, the altcoin is ranked 10th in the crypto market. This comes after regaining its prestigious top 10 rank after briefly being flipped by Shiba Inu (SHIB).
While the short-term outlook is bearish, investors are optimistic about its long-term outlook. One key trigger for a bullish breakout is the possibility of a Cardano (ADA) spot ETF approval.
Speaking at the Consensus 2024 conference, Ripple CEO Brad Garlinghouse has tipped Cardano to receive an ETF approval after XRP.
Innovation on the network could also be key to its development with co-founder Charles Hoskinson advocating for the blockchain to be key to revolutionizing the financial markets.
Popular crypto analyst Alexander Legolas has given a hint about the conditions that need to be achieved for ADA to break out of its bearish trend in June. The analyst poses that Cardano might need to secure a Stochastic RSI cross on the weekly chart.
The last time $ADA got a STOCHASTIC RSI cross on the weekly chart, ADA pumped 72% from $0.47c to $0.81c
The time before that when we got a weekly Stochastic RSI cross ADA pumped 184% from $0.24c to 0.68c. Check both charts below 👇🏾
Moral to the lesson is we need a weekly… pic.twitter.com/LlyNroZNND
— Alexander Legolas (@ShillMoBaggins) May 31, 2024
This offers a 72% return if the altcoin can achieve this, moving from $0.47 to %0.81. Bulls could extend their run to reach $1, testing the next key resistance.
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