Cardano forms a bearish inverse cup-and-handle pattern with a potential target of $0.179 if support fails.
Daily active users on the Cardano blockchain have dropped over 60% since last year, reflecting slowing network usage.
Cardano’s futures market and chain fees have sharply declined, signaling weakening investor interest and user activity.
Cardano’s price declined to $0.584 following two days of gains, reflecting broader market sentiment across the crypto sector. Although this shows a short-term recovery, ADA is once again under bearish pressure due to the technical indicators and network activity, as there may still be some downside to go.
On the daily chart, Cardano peaked at $0.863 on May 12 and has since retraced. The asset is forming an inverse cup-and-handle pattern, considered a bearish continuation signal. The pattern’s upper boundary lies at $0.863, with support at $0.519.
Source: TradingView
Currently, the price is in the handle phase, which typically precedes a decline. Based on the pattern’s height of $0.344, a breakdown below $0.519 could send ADA to $0.179.
Death Cross Signals Prolonged Downtrend
One additional important signal appeared on June 4, when the 50-day exponential average moved below the 200-day EMA. This death cross can be considered the beginning of the long-term decline. ADA has been below the 200-day EMA, and it currently serves as a resistance line at $0.703.
Other than price action, Cardano's on-chain developments are also weakening. The use of the app daily has fallen to just 20,000 in June compared with 54,400 at its peak last year, according to Artemis data. This steady drop raises concerns of deteriorating interest among users in the platform.
Transactions and Fees Plunge on Cardano Chain
The total number of monthly transactions has also dropped to 619,000, marking a yearly low. This stands in sharp contrast to Solana, which recorded more than 2 billion transactions over the past month.
In addition, Cardano’s chain fees fell to $146,000 in the last 30 days, a steep decline from $978,000 in December. Solana’s fees exceeded $26 million during the same period.
Cardano’s futures market has also cooled off, with open interest falling to under $822 million. This marks a $678 million decrease from this year’s high of $1.5 billion, indicating lower speculative demand.
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