Cardano’s decentralized exchange (DEX) has experienced a surge in daily trading volume, exceeding 23 million ADA, amid price volatility.
While the DEX volume has seen a significant increase, other indicators suggest a bearish outlook for Cardano (ADA). The total value locked (TVL), ADA capital flow, and NFT trades have all plummeted, indicating a decrease in interest and potential challenges ahead.
The rise in DEX volume, surpassing 23 million ADA, aligns with a recent decline in price. This surge in trading activity could signal heightened volatility in the days and weeks to come, potentially leading to significant buying or selling.
However, the drop in TVL from $430 million to $230 million raises concerns about decreasing interest in Cardano and its built-in dApps. Additionally, the network has observed a decline in NFT sales, mirroring the trend seen on other networks.
These factors could have a negative impact on ADA prices in the near future. On-chain metrics also point towards bearish pressure, causing worry among ADA investors. Technical indicators such as the RSI and CMF have significantly declined, indicating a decrease in buying pressure.
Furthermore, the MVRV ratio for ADA has fallen considerably, indicating a decline in profitability for most addresses. In response, investors may choose to take advantage of discounted prices to accumulate more tokens or sell their holdings to mitigate potential losses.
As of now, ADA is trading at $0.4493 after experiencing a correction in the past week. The altcoin has seen a 3% loss in the last seven days. With a market capitalization of $15.8 billion, ADA is currently ranked 10th in the cryptocurrency market. It recently regained its position in the top 10 after being briefly overtaken by Shiba Inu (SHIB).
While the short-term outlook appears bearish, investors remain optimistic about ADA’s long-term prospects. The potential approval of a Cardano (ADA) spot ETF could serve as a catalyst for a bullish breakout. Ripple CEO Brad Garlinghouse has mentioned the possibility of Cardano receiving an ETF approval following XRP.
Innovation on the Cardano network is also seen as crucial for its development, with co-founder Charles Hoskinson advocating for its potential to revolutionize the financial markets.
Crypto analyst Alexander Legolas has provided insights into the conditions necessary for ADA to break out of its bearish trend in June. He suggests that Cardano might need to secure a Stochastic RSI cross on the weekly chart, citing previous instances where such a cross led to significant price increases.
Achieving this milestone could result in a 72% return for ADA, moving from $0.47 to $0.81. If bullish momentum continues, the altcoin could potentially reach $1, testing the next key resistance level.
For further information on Cardano, consider reading our Buy Cardano Guide, Cardano Wallet Tutorial, and checking the 24-hour Cardano price. Stay updated with the latest Cardano news as well.