Cardano’s price experienced a significant drop below $0.43 on May 1st, following a month of losses in April. The decline in price can be attributed to various factors, including the cautious approach of crypto investors after Bitcoin’s halving. This cautious sentiment led to a decrease in demand for major altcoins like ADA, SOL, and ETH.
Despite the Cardano team’s announcement of a planned hardfork to improve peer-to-peer transactions on the network, the price of ADA remained relatively stagnant. The optimism surrounding the Ouroboros Genesis rollout did not translate into a bullish trend for the cryptocurrency. As of May 1st, ADA’s price hit its lowest point since April 13th, reaching $0.43.
One significant factor contributing to the negative price action of ADA is the withdrawal of 80 million ADA coins from the Cardano DeFi ecosystem within a span of 60 days. This withdrawal indicates a decline in demand and liquidity within the DeFi protocols, which has a direct impact on the native coin’s price. When coins are locked in DeFi protocols, it temporarily reduces the supply available in the market. Therefore, a decrease in demand for ADA within these protocols leads to increased selling pressure on the native coin.
The withdrawal of 119.2 million ADA coins from DeFi smart contracts has added approximately $50 million to the short-term market supply. If this trend continues, it is possible that the price of Cardano could drop as low as $0.30 in the coming weeks. However, there is a potential lifeline for Cardano bulls, as there is a significant support level at $0.40. If the bulls manage to trigger a rebound from this support level, it could reverse the current bearish trend and potentially push the price above $0.50.
It is important to note that the information provided in this article is for informational purposes only and should not be considered financial advice. Readers are encouraged to conduct their own research before making any investment decisions. The views expressed in this article are solely the author’s opinions and do not reflect the opinion of The Crypto Basic. The Crypto Basic is not responsible for any financial losses incurred.