According to technical indicators Cardano (ADA) which stands as one of the market’s biggest cryptocurrency by capital value faces an ongoing deeper price drop in the near future. A “death cross” bears ominous meaning for the coin because its value dropped by over 51% since reaching its high point last November.
Cardano currency recorded $0.646 as its trading value which resulted in $22.7 billion market capitalization while the article was being published. The market sell-off affects all major cryptocurrencies including Solana (SOL), Binance Coin (BNB) and Avalanche which demonstrate falling bearish trends.
Death Cross Looms for Cardano
Cardano has progressed into a critical technical position which looks increasingly negative. The network stands at risk of a death cross as the 50-day and 200-day Exponential Moving Averages (EMAs) present at $0.736 and $0.729 remain close to merging. A price decline occurs abruptly after both short and long-term averages cross while moving downward against each other.
The narrowing gap between Cardano’s EMAs now stands at less than 20% after a widespread expansion above 20% few weeks ago because its momentum has weakened. When ADA followed this trend during May of the previous year its price dropped by 40%. The last golden cross in November 2023 led to an approximately 200% price increase which demonstrates how such chart patterns influence market performance.
ADA presents two bearish indicators because it has both constructed a descending channel and a head-and-shoulders pattern which technical analysis defines as continuation patterns. Complementing these technical patterns analysts project that the price will drop toward the $0.515 support level which was last reached during February.
Cardano Faces Stiff Competition in DeFi Sector
Fundamental issues along with technological measurements produce negative effects on Cardano’s future performance. Despite its high market capitalization Cardano features a smaller decentralized finance space than upstart competitors in the market. The DeFi protocols of Cardano now maintain a combined total value locked (TVL) worth only $314 million.
Berachain along with Sonic and Sui and Sei have attracted substantially higher cryptocurrency liquidity than Cardano. The TVL of Berachain currently surpasses $2.9 billion at the same time Sui maintains a TVL of $1.2 billion. The significant difference in DeFi space market competition capabilities between ADA and newer competitors results in serious performance questions for the former.
The decentralized exchange market features stablecoin liquidity as an important factor to consider. The stablecoin holdings of ADA amount to $30 million whereas Berachain maintains $1.3 billion and Sonic holds $576 million Future prospects for Cardano become unclear because of delayed implementations and unresolved uncertainties.
Some key features which were widely anticipated within the Cardano platform are still missing from the releases. The integration of BitcoinOS with blockchain remains a proposed initiative that developers have yet to implement as per October 2024. Fans of Cardano remain uncertain about the outcome of a vital meeting between Charles Hoskinson. The founder has yet to provide any official updates.
ADA ETF prospects provide optimism about new investor money flow but experimental evidence shows BTC is the only cryptocurrency ETFs generating market interest. Ethereum ETFs recently lost significant money to investors who seem more interested in BTC investments.
The combination of technical indicators and on-chain fundamentals signals potential additional losses for Cardano investors which will create an impaired market situation. If this bearish trend proves correct along with the death cross confirmation ADA may potentially decrease by another 40% thus affecting the confidence level of its investors.