Cardano price showed strong performance in the last two weeks surging from lows of $0.3 to $0.36. The long bottom wick on last week's candle shows
Cardano price analysis reveals a bullish trend with a 14% gain last week. However, ADA price still risks a drop to $0.2, as macro technical analysis indicates.
Despite the gains, ADA price still faces the possibility of a drop. Here's why according to the analysis by Fxstreet.
Surging TPS, Falling Usage
A closer examination of Cardano network activity reveals that the blockchain benötigt assistance onboarding users despite scaling up its capacity to handle many people. According to Cexplorer, Cardano TPS has been increasing, but the transaction count has been dropping.
This divergence in the two metrics seems counterintuitive and suggests reduced network activity, which is typically bearish for the Cardano price. While the network itself could be pristine, users could be demotivated by crypto market conditions or other external events.
With lower TPS, the long queue of transactions can give the impression that a network has a higher transaction count. However, when TPS is increased, there are little to no lagging transactions. This helps to get a clearer picture of whether the network has users.
Cardano TVL Is Steadily Dropping
Cardano total value locked (TVL) has been dropping since March 2024 highs, when there was a mini-bull run. The spike in TVL during that time was expected as new users were potentially entering the market due to the approved Bitcoin ETF. However, in the following market correction, Cardano could not maintain its users.
TVL dropped from $490 million in March to $181 million in August, suggesting investors have been slowly pulling funds from the Cardano ecosystem.
Daily Active Users Drop With Growing Network Capacity
The Cardano network capacity has grown in 2024, meaning the blockchain can handle many users, as seen by increasing TPS. The other metric is the network capacity (red), which has been increasing steadily, reinforcing Cardano as a robust network. However, the actual network capacity used (green) has been dropping, which suggests reduced demand for the network and the underlying asset.
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