The Cardano price retreated to the lowest level since February 3rd as the risk-off sentiment in the market escalated. ADA, its native token, is trading at $1.02, which is almost 20% below its highest level last week. As a result, its total market capitalization has crashed to more than $32 billion, meaning that long-term investors have lost over $58 billion.
Cardano network activity
Cardano is a proof-of-stake network that seeks to become a better platform for developers and users than Ethereum.
Through its layered platform, users are able to build decentralized applications (dApps) for multiple purposes. Their ability to build these apps started last year when the developers launched the Alonzo hard fork that introduced these features.
Today, the number of projects built in Cardano has been in an upward trend. While several projects have already been launched, most of them are currently in their testnets.
SundaeSwap is the biggest project built on the Cardano platform. It is a decentralized platform that enables people to swap different currencies. As a result, it is competing with the likes of PancakeSwap and Uniswap.
Other projects built in Cardano are AdaSwap, Cardano Mixer, ADA Finance, Cardwallet, and Ardana, among others.
However, the platform has a long way to go to catch up with Ethereum and Terra. According to DeFi Llama, Cardano has a total value locked of $103 million. In contrast, Ethereum has a TVL of over $120 billion.
Still, this performance is good considering that Cardano started accepting smart contracts a few months ago. As shown above, the TVL has moved from almost zero in January to over $103 million.
Meanwhile, other on-chain data shows that network activity in Cardano is booming. According to Messari, the total transactions in the past 24 hours was worth $17.5 billion. In contrast, Bitcoin had a transaction volume of about $10 billion.
The same trend was seen when you consider adjusted volume. Cardano’s adjusted volume was $16.2 billion, while BTC’s was $4.67 billion. These numbers show that there is strong activity within the network.
The Cardano price is falling as investors rush to safety as geopolitical risks rise. On Friday, the US warned that Russia had gathered enough troops and equipment to invade Ukraine. They warned that the attack could happen in the coming days.
As a result, investors rushed to safe-haven assets like the US dollar and gold while cryptocurrencies and stocks declined. The tech-heavy Nasdaq 100 index declined by more than 400 points while the S&P 500 fell by over 1.25%.
There is also the risk of monetary policy. Data published last week showed that American inflation surged to the highest level in over 40 years. Now, the ongoing geopolitical issues have affected the prices of energy, meaning that inflation will keep rising. For example, the price of crude oil is approaching $100 while natural gas has also risen.
Therefore, there is a likelihood that the Federal Reserve will embrace a more hawkish tone in the coming months. Risky assets like Cardano and other cryptocurrencies tend to underperform in a period of high rates.
Cardano price prediction
The Cardano price has been in a strong bearish trend in the past few days. Precisely, it has fallen by about 20% from its highest level this week. Along the way, it has fallen below the 25-day and 50-day moving averages. It is also approaching the key support level at $1, where it struggled, moving below several times this year. Therefore, there is a likelihood that the coin’s price will keep falling in the coming days.