- Cardano’s ADA has come under pressure in the past few weeks.
- The total value locked (TVL) in its ecosystem has jumped to a record high.
- The number of daily transactions in Cardano rose in Q2.
Cardano price has remained in a consolidation phase in the past few days. ADA token price was trading at $0.2938, where it has been at in the past few days. This price is about 22% below highest level in July.
Cardano metrics improving
One of the common worries in the crypto industry is Cardano’s ecosystem, with some experts warning that it is a ghost chain. A ghost chain refers to a blockchain that has no ecosystem. Cardano’s case is further exacerbated by the fact that ADA, its token, has a total market cap of over $10 billion.
However, recent data shows that Cardano’s ecosystem is thriving. For example, data compiled by Messari shows that Cardano’s blockchain activity jumped by almost 50% in the second quarter of the year.
In this case, the average daily transactions jumped to over 68k during the quarter compared to 67k in Q1. This figure is still down from over 98k in the same quarter in 2022. The number of daily active addresses dropped to about 57k.
Read more: How to buy Cardano.
Meanwhile, activity in its DeFi sector is going through strong growth. Cardano has a total value locked (TVL) of over 760 million ADA, up from 260 million in January. In dollar terms, this TVL stands at over $221 million.
The biggest players in Cardano’s ecosystem are Minswap, Indigo, Liqwid, MuesliSwap, and VyFinance. Most of these platforms have seen their TVL jump by double digits in the past 30 days. The report added:
“Transaction activity, on the other hand, did increase in Q2. Average daily transactions were up 1.9% QoQ from 67,500 to 68,800. This is important to note as movement in transactions and active addresses are typically correlated.”
Still, despite these improving metrics, the issue of valuation is a real one. It is extremely difficult to justify whether ADA has a $10 billion valuation. For example, Tron, which has a market cap of over $6 billion, has a TVL of over $5.7 billion and stablecoins worth $44 billion.
Cardano price prediction
The 4H chart shows that Cardano price has been in a slow downward trend in the past few weeks. It has formed what looks like a head and shoulders pattern, which is usually a bearish sign.
ADA price has moved below the 25-period and 50-period moving averages while the Relative Strength Index (RSI) has drifted upwards. The coin is along the lower side of the ascending channel.
Therefore, the outlook for ADA is bearish, with the next key support level to watch being at $0.260, which is about 10% below the current level. The alternative for this is where ADA price bounces back and retests the key resistance point at $0.3180.
