Cardano price has staged a strong comeback in the past few days, moving from the year-to-date low of $0.1375 to a high of $0.1772. ADA has soared to its highest point since June 15. Still, it faces some major challenges amid the fading ecosystem growth.
Cardano Price Soars Amid the Crypto Rebound
ADA token held steady on Saturday morning, mirroring the performance of other tokens. Bitcoin jumped to $62,500, while Ethereum, XRP, and Binance Coin token jumped by over 3% in this period.
The rebound intensified after the US published the latest non-farm payrolls (NFP) data. This report showed that that the economy added just 57k jobs last month, while May’s figure was revised downwards to 129k.
These numbers raised concerns about the economy, lowering the possibility that the Federal Reserve will hike interest rates in the coming months.
Still, Cardano is facing some major challenges ahead. For one, its ecosystem growth has slowed substantially, such that it is now widely seen as a ghost chain. For example, it has no market share in the booming real-world asset tokenization industry.
Cardano’s total value locked (TVL) in the decentralized finance (DeFi) industry has dropped to $85.76 million. It had peaked at over $655 million a few months ago.
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Most notably, Midnight has not been as successful as Charles Hoskinson predicted. It is unclear whether any products have been launched on the network. Also, despite its $550 million its market capitalization, its 24-hour volume was just $7.9 million. DeFi Llama does not track any dApp that runs on the network, making it a ghost chain.
Charles Hoskinson’s efforts to reinvigorate Cardano’s growth have largely disappointed. For example, the introduction of Pyth Network as an oracle in the network has not led to a surge in activity.
ADA Price Technical Analysis: potential dead-cat bounce
Cardano price chart | Source: TradingView
The daily chart shows that Cardano’s price bottomed at $0.1376 earlier this month and then bounced back to the current $0.1781. It is still hovering near its lowest level in over 6 years, a sign that this rebound is a dead-cat bounce. A DCB is a short-term recovery that is normally followed by more downside.
One reason to be afraid of this rebound is that it is yet to cross the 50-day Exponential Moving Average (EMA) of $0.1783. A short-term reversal will only be confirmed if it jumps above that level and the 200-day MA of $0.2918.
A drop below the support of $0.1376 will point to more downside, potentially to $0.100.
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