The price of #Cardano has dropped into a bear market by more than 24% from its highest level since the beginning of the year; technical indicators in the decentralized finance sector suggest further declines.
Summary
The price of Cardano formed a head and shoulders pattern and an ascending wedge on the daily chart.
The total value locked in its decentralized finance system has decreased in recent weeks.
It has not benefited from the #GENIUS due to the collapse of the stablecoin supply.
Cardano's currency ($ADA ) has dropped to $0.7736, its lowest level since August 12, reflecting the performance of most altcoins like Ethereum and Solana.
One of the main reasons for this decline is that the performance of Cardano's decentralized financial system has been below that of similar currency chains. The total value locked has dropped to $320 million, its lowest level in months, and much lower than its peak of $680 million at the beginning of the year.
The Cardano platform has not seen any major new decentralized finance applications this year.
At the same time, Cardano is not benefiting from the recently enacted GENIUS Act, as the total supply of stablecoins on its network has decreased by 4.4% in the past seven days to $37 million. This supply is much lower than that of newer blockchains like Unichain, Linnea, and Plasma.
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The decentralized trading ecosystem of Cardano has seen a notable calm, with trading volume continuing to decline. These DEX networks handled only $1.4 million over the past 24 hours.
Additionally, there are signs of weak institutional demand for Cardano, as Grayscale has only applied for a spot trading fund for ADA. In contrast, currencies like Solana ($SOL ) and Ripple ($XRP ) attracted at least 7 applications.
Technical analysis of Cardano's price
Technical analysis indicates further declines in Cardano's price in the coming weeks. An ascending wedge pattern has formed on the daily chart. Upon closer inspection, it appears to have already fallen below the minimum of this pattern, indicating further declines.
As Cardano's price formed a head and shoulders pattern, it has already fallen below the neckline.
ADA's price has fallen below the 50 and 100-day exponential moving averages, indicating bearish control.
The Average Directional Index has moved to 22, indicating increasing bearish trend strength.
Therefore, these patterns suggest a potential further decline, which could reach a low of $0.5095 in June, about 35% lower than the current level.
