Why is #Cardano price down today?
Cardano ADA is showing weakness today, trading at $0.898, down 8% over the last 24 hours. A weakening technical structure and several onchain signals suggest that ADA could slip lower in the near future.
Let’s look at the factors driving Cardano price down today.
Decreasing Cardano network activity
The Cardano network has witnessed a remarkable drop in user engagement since the beginning of December.
Data from Artemis shows that the number of daily active addresses on the Cardano blockchain has dropped from 96,700 on Dec. 3 to around 40,700 on Dec. 18.
Similarly, daily transactions have declined from approximately 144,300 to 72,500 over the same period.
Additionally, the total value locked (TVL) on Cardano has been trending down in December. The chart below shows that the TVL fell by over 36% from about $708.9 million on Dec. 3 to approximately $450.82 million at the time of publication.
This drop in network TVL is not solely confined to Cardano. The total value locked in DeFil protocols on Cardano has also contracted significantly, as shown in the figure below.
Among the leading projects in Cardano’s DeFi ecosystem, Splash protocol—a decentralized open-source platform—stands out with its TVL dropping by 53% over the last week.
The declining network activity and reducing TVL on Cardano indicate diminished user interaction, decreasing demand for ADA tokens and negatively impacting its price.
Stiff overhead resistance above $0.90
With ADA price trading at $0.88, bears appear to have established strong resistance above $0.90, as per data from IntoTheBlock.
The in/out of the money around price (IOMAP) chart below shows that between $0.91 and $0.93, over 59,150 addresses had previously acquired roughly 1.12 billion ADA tokens at an average price of $0.92.
Meanwhile, veteran trader Peter Brandt shared an ADA price chart suggesting a “crash” is coming if Cardano lost this crucial support at around $0.91.
Pseudonymous technical analyst Sssebi acknowledges the importance of this level, saying that the failure to hold it would lead to deeper corrections.
“If $0.92 doesn’t hold there is a big probability that we are going to retest $0.80.”
