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Cardano (ADA) has entered a local bear market, with its price showing signs of potential further decline. This downturn comes as on-chain metrics and ecosystem activity reveal a drop in network engagement and social dominance.

Cardano Price Update

At last check, Cardano’s price had fallen to $0.668, marking a significant 22% decline from its peak in May. This price level is the lowest recorded since May 6, raising concerns about the coin’s short-term prospects.

Declining On-Chain Metrics

Recent data highlights a noticeable drop in Cardano’s network activity. According to blockchain analytics, Cardano’s social dominance score has fallen to 0.792%, down from 1.8% in May. This decline indicates reduced discussions about Cardano on social media platforms such as X (formerly Twitter) and Reddit.

Additionally, the number of daily active addresses interacting with the network has significantly decreased. On Friday, only 21,565 addresses were active, compared to over 60,500 in May. This drop suggests waning interest and interaction within the network.

Other Key Metrics Indicating Weakness

  • The Mean Dollar Invested Age (MDIA), which reflects the average age of invested coins, has plummeted. The 365-day MDIA is now at -425, compared to 62 in September last year. This indicates increased movement of older coins.
  • Cardano’s Realized Profit/Loss metric has shifted into the negative territory, hinting at investor capitulation.
  • The Market Value to Realized Value (MVRV) ratio has also turned negative, standing at -0.019. While this suggests the asset could be undervalued, the current ratio is still higher than levels seen in April, when ADA rebounded.

Cardano Ecosystem Struggles

Beyond price and on-chain activity, Cardano’s broader ecosystem metrics also paint a challenging picture. The total value locked (TVL) in its decentralized finance (DeFi) ecosystem has dropped to $387 million. Meanwhile, the total supply of stablecoins within the network stands at just $30 million. These figures lag behind newer blockchain platforms that have gained traction in 2023.

Cardano Price Technical Analysis

A review of Cardano’s price chart shows a continued downtrend since December, when ADA was priced at $1.317. The coin is now trading at $0.66, having broken below a descending trendline connecting recent swing highs.

Recently, Cardano formed a double-top pattern at $0.845 and has since dropped below its neckline support at $0.713. This move aligns with bearish sentiment, further reinforced by ADA trading below its 50-day and 200-day Weighted Moving Averages.

What’s Next for ADA?

Given the current momentum, Cardano’s price could continue to decline. Sellers might target the next critical support level at $0.513, which represents its lowest price point from April. This would imply an additional 23% drop from current levels.

Investors should monitor these technical levels and key metrics closely, as they could provide insight into potential recovery or further downside risks.

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