Cardano price has been in a strong bear run this month and is now hovering at its lowest level since November last year. ADA has dropped for 4 consecutive weeks and is down nearly 70% from its year-to-date high. Most notably, it has suffered a $76 billion wipeout, with its market cap plunging from $90 billion in 2021 to $14 billion.
Cardano Price Technicals Point to More Pain Ahead
The daily timeframe chart shows that the ADA price has been making a series of lower lows and lower highs in the past few months. It initially peaked at $1.019 earlier this year and has since tumbled to $0.4137.
Technicals suggest that the Cardano price has more downside to go. The most important aspect is that the coin has formed an inverse cup-and-handle pattern, one of the most accurate bearish patterns in technical analysis.
Cardano has already moved below the important support level at $0.50, the lower side of this pattern. At the same time, the coin remains below the Supertrend indicator. In most cases, assets remain in a bear market when this indicator is red.
Cardano has formed a death cross, a pattern in which the 50-day and 200-day moving averages cross. The Average Directional Index (ADX) has jumped to the highest point since July 22. A rising ADX indicates that an asset is gaining momentum.
Therefore, the most likely Cardano price forecast is bearish, with the next key level to watch at $0.3020, the lowest level on August 24 last year. Over time, it is likely to drop to the psychological level at $0.10.
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ADA Fundamentals Have Worsened
A closer look at third-party data shows that Cardano’s fundamentals have deteriorated. The first notable one is that the number of users has continued falling this year, a sign that holders have started to capitulate.
DeFi Llama data shows that the number of active addresses has crashed to just 18,560. In contrast, other similar networks, such as Solana and BNB, have over 2 million active addresses.
Additional data shows that Cardano is not making any money. Its chain fees stand at zero, while other networks like Solana and BNB make millions of dollars a month.
Meanwhile, the total value locked (TVL) in the network has decreased by over 35% in the last 30 days to $188 million. This figure is much lower than other popular coins like Plasma, Berachain, and Base.
Most importantly, there is a risk that upcoming initiatives such as Midnight, Leios, and Hydra will not be as successful as Hoskinson predicts.
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