- Cardano has been on a recovery in the past three days, reversing the bearish trend that saw ADA shed 29% of its value in just three weeks to bottom out at $0.45.
- However, it has yet to recover its market interest as its funding rate remains unimpressive, its RSI struggles to break past the halfway mark, and ADA supply in profit declines.
Cardano’s ADA has had a rough start to the year. On January 2nd, it hit its highest price for 2024 at $0.6317 after an impressive rally in December. However, since then, it went on a bearish run, shedding 29% to set a 2024 low at $0.45. In the last three days, it has been on a recovery that experts say could set it up for a better run in February.
At press time, ADA is changing hands at $0.4874, losing about 1% in the past day for a market cap of $17.26 billion, the eighth highest in the crypto market.
While data shows that it has lost 2% in the past week, a closer inspection tells a different story. ADA started the week at $0.4968. However, it dipped almost immediately on January 23 to set a monthly low at $0.4501. Since then, the token has been a recovery that has seen it set a new weekly high at $0.4985, a 10.7% gain in five days.
Some on-chain metrics have improved in that time as well. Its relative strength index stands at 53 at press time, a rise from an average of 40 in the past day, showing investors’ confidence in ADA is gradually returning.
And yet, despite the recovery, investors remain unconvinced about ADA’s potential in the long run. Trading volume stands at $290 million in the past day, a 6.2% dip and the lowest it has been over the past week. The funding rate has barely changed all month, and while bulls seem to still be in control, they are not as aggressive as they were in December. This lackluster demand is also reflected in the open interest, which, at $208 million, has barely moved in the past two days.
Other metrics that don’t paint Cardano in the best light include the percentage of ADA supply in the profits. This figure dipped from its 70% December peak to 60%, but it has since slightly recovered.
What’s Next for Cardano (ADA)?
While the price remains unimpressive, Cardano’s ecosystem has continued to see massive growth. Its DeFi space has been a bright spot in recent times, with the total value locked standing at $334 million at press time. This represents 318% growth in the past year as platforms like Indigo and Minswap continue to thrive. One newcomer, MuesliSwap, recorded a 70% surge in users in the past week alone.
In another exciting development for the Cardano community, the team behind Fluid Tokens has released an implementation of the new native Cardano standard for ERC20 tokens that allows USDC and other Ethereum tokens to be issued on the Cardano network without any changes to the blockchain.
USDC & ERC20 Tokens on Cardano.
— FluidTokens (@FluidTokens) January 29, 2024
