The Cardano price remains in a deep bear market, having fallen by over 47% from its peak in December last year. It was trading at $0.697 on Tuesday, a few points above its lowest point this month. This article explains why a key Cardano statistic presents a risk to its price.
Cardano Stablecoin Supply Points to Near Ghost Chain
A common criticism of Cardano is that it is the largest ghost chain in the cryptocurrency industry. A ghost chain is defined as a blockchain project that has little to no activity.
Cardano has a market capitalization of over $26 billion; however, a closer look at its ecosystem reveals that little activity is occurring there.
The most relevant metric to consider is the stablecoin supply within a chain. This is an important metric because the only way to interact with a blockchain network is through these coins. A network with more stablecoins can also attract more developers, which is a sign of a healthy DeFi ecosystem.
DeFi Llama data shows that Cardano’s network has a stablecoin supply of $32 million. This is a relatively small amount, considering the stablecoin industry is worth over $250 billion.
The stablecoin supply on Cardano is also notable because some of the newest crypto projects have overtaken it. For example, Unichain, which was launched in February, has $294 million in stablecoins. Similarly, Sonic, Berachain, and Aptos have $441 million, $214 million, and $1.3 billion, respectively.
Another critical metric to watch, which is more significant than the DeFi TVL, is the volume of cryptocurrencies traded on its decentralized exchange (DEX) networks. A healthy chain should have higher volume in its DEX platforms.
In Cardano’s case, the volume traded in the last 30 days was just $108 million. Unichain handled $9.9 billion, while Base handled $31 billion.
Cardano is pegging its hopes on its integration with Bitcoin. However, as we wrote recently, what Cardano is working on is not entirely new, as Bitcoin staking exists today through networks like Lombard Finance and Solv Protocol.
Cardano Price Technical Analysis
The daily chart indicates that the ADA price has remained under pressure this year. It has formed a descending channel, comprising a series of lower lows and lower highs.
The token has also crashed below the key support level at $0.809, the highest swing on March 14. Worse, it has formed a death cross pattern, as indicated by the 50-day and 200-day Exponential Moving Averages (EMAs). This cross often leads to more downside.
Therefore, the Cardano price will likely continue to fall as sellers target the lower side of the channel at $0.40. A move above the upper side of the channel at $0.862 will invalidate the bearish view.
READ MORE: ADA Price Prediction if a Key Cardano Catalyst Fails
