Cardano Price Prediction: ADA is Still Severely Overvalued

Cardano price remained under intense pressure this week as the fear and greed index dropped to the lowest level in months. Ada crashed to a low of $0.43, which is the lowest level since August of this year. This price is about 86% below its all-time high, giving it a market cap of over $14.3 billion.

Cardano is still severely overvalued

Cardano price has been in the spotlight recently as investors focus on the recently implemented Vasil hard fork. This was an important upgrade that brought more functionality to Cardano’s ecosystem. For example, it has led to faster transaction throughput, efficiency, and block latency speeds.

This week, the developers unveiled Plutus V2 functionality for developers on the mainnet. As such, dApps using the network have seen a sharp reduction in size and costs. For example, a transaction in V1 on MuesliSwap costs 1.44 $ADA while in V2 costs 0.73 $ADA. Cardano’s price reacted mildly to the Vasil upgrade.

Still, analysts believe that Ada is still severely overvalued even after its market cap collapsed from over $90 billion to $14 billion. They cite the fact that Cardano’s ecosystem is substantially smaller than other blockchains like Ethereum, Solana, and Tron.

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For example, in DeFi, Cardano has a total value locked (TVL) of just $76 million. Of this amount, Minswap has a market dominance of 51.8%. It is followed by WingRiders, SundaeSwap, and MuesliSwap.

As such, this means that Cardano does not generate substantial fees. DeFi Llama ranks 27 blockchains by fees. Wombat Exchange is the last one with $243 in fees while Cardano is not ranked.

Cardano also has a negligible market share in other industries like non-fungible tokens (NFT) and the metaverse. It ranks nowhere when it comes to NFTs, according to data compiled by CryptoSlam. Therefore, it is still unclear why Ada is still valued at $14 billion.

Cardano price prediction

The daily chart shows that Ada price has been in a strong bearish trend in the past few weeks. A closer look shows that it has struggled to move below the important support level at $0.4175. Cardano has moved below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) and the Awesome Oscillator has moved below the neutral point.

Therefore, the coin will likely continue falling as sellers target the next key support level at $0.35, which is about 18% below the current level. A move above the resistance at $0.50 will invalidate the bearish view.