Cardano (ADA) Rebounds 40% From Monthly Low but Sentiment Wanes

Cardano (ADA) has has bounced back by 40% from its lowest point this month but remains 45% below its highest point this year.

Cardano (ADA) has risen by 40% from its lowest point this month, but it is still trading 45% below its highest point this year.

The cryptocurrency, which ranks among the largest by market capitalization, has faced immense pressure in recent months. Its market cap has fallen from over $90 billion in 2021 to $15.9 billion on Wednesday.

External data shows that interest in Cardano among developers and investors has waned recently. According to DeFi Llama, the number of monthly developer commits has dropped from 3,380 in May to 3,300 in June, and currently stands at less than 2,000 this month.

Furthermore, the amount of money locked in Cardano’s decentralized finance (DeFi) applications has decreased from a record high of 633 million ADA in December 2023 to 538 million ADA on Wednesday. Its total value locked (TVL) of $247 million is also small compared to that of newer blockchains like Base, Blast, Sui, Mode, and Aptos.

Unlike Solana, BNB Chain, and Ethereum, Cardano does not host any major meme coin or decentralized exchange (DEX). Minswap, its largest DEX, handled less than $1 million in transactions in the past 24 hours, compared to Solana’s Raydium, which processed $851 million.

Cardano also has a limited market share in the declining NFT market, with sales of less than $1.6 million in the past 30 days. The number of Cardano addresses has dropped to less than 30k, and the amount of stablecoins is less than $20 million.

Cardano sentiment is turning sour

According to Santiment, sentiment among traders has been declining of late. Notably, Cardano's trading volume has remained below $500 million since July 5th.

In comparison, smaller meme coins like Pepe and Dogwifhat are handling over $700 million daily. The same trend can be observed in the futures market.

According to data from Santiment, interest among traders has reached its lowest level in months. Most traders are primarily concerned with the coin’s underperformance and lack of developer activity.

trader sentiment is following the price action

With XRP making an emergence this week, bullish narratives have erupted. On the other end of the spectrum, Cardano is seeing the most bearishness in over a year. Counter-trading the crowd's consensus could prove profitable.

Cardano also has one of the lowest staking yields in the market. According to StakingRewards, it has a staking yield of less than 3%.

On the technical side, ADA price is still trading below the 200-day moving average, which suggests that the ongoing recovery may be short-lived.

On a positive note, the crypto fear and greed index is about to flash green as hopes of a Federal Reserve rate cut rise. Hence, ADA price is likely to rise if Bitcoin sustains its rally and crosses the year-to-date high of $73,400.

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