Cardano Faces Network Activity Decline Amid Bullish Price Indicators
NAIROBI (CoinChapter.com) — Cardano (ADA) faces a steep decline in network activity, raising concerns about its long-term viability. Despite this, bullish indicators suggest a potential price breakout, fueling debate on ADA’s trajectory.
Cardano’s Network Activity Plunges
Messari’s Q4 2024 report reveals a sharp downturn in Cardano’s daily transactions. The blockchain processed an average of 71,500 transactions per day, with only 42,900 daily active addresses. This marks a 73% drop in decentralized application (DApp) activity compared to Q4 2023.
Cardano key metrics overview, Q4 2024. Source: Messari
In contrast, Solana recorded 22 million daily DApp transactions in the same period, while Ethereum amassed $552 million in quarterly fees. Cardano’s transaction fees totaled just $1.8 million, reflecting its struggle to maintain market relevance.
Electric Capital ranks Cardano 12th in developer count, with 449 developers actively contributing. While this places it among notable blockchains, it lags behind leading platforms like Ethereum.
Can Cardano (ADA) Maintain Its Price Stability?
Despite low network activity, ADA has outperformed major cryptocurrencies over the last six months. According to TapTools, ADA gained 102.82%, surpassing Bitcoin’s 39.98% rise and Binance Coin’s 10.53% increase. Ethereum, meanwhile, declined by 19.80% over the same period.
Technical analysts are monitoring ADA’s support levels. LaCryptoLycus, a trader on X, noted a double bottom pattern forming on the weekly timeframe. He predicts that maintaining support above $0.70 could push ADA past $1.00, while a breakdown could see it retest $0.50–$0.40.
Meanwhile, sentiment around ADA remains high. Santiment reported that ADA’s social media sentiment reached its most bullish level in over four months, partly due to the SEC recognizing its smart contract use case for government services.
Critics have questioned Cardano’s decentralization, alleging control by three entities: the Cardano Foundation, Input Output Global (IOG), and Emurgo. Charles Hoskinson, Cardano’s founder, dismissed these claims, arguing that misinformation about Cardano’s governance continues to spread despite factual corrections.
“It takes millions of dollars and years to correct the effort,” Hoskinson stated in response to the claims.
Will ADA Break Past $2.95?
Market analysts are divided on Cardano ADA’s price outlook. Some forecast a potential bullish target of $2.95, while others expect a range between $0.67 and $2.21. ADA currently trades at $0.6932, down 3% in the last 24 hours, with a market capitalization of $24.44 billion.
The next key resistance stands at $0.80, while a break below $0.705 could confirm a deeper correction. If network activity remains low, sustaining long-term price gains may prove challenging for ADA.
Conclusion
Cardano’s declining activity and centralization concerns present hurdles for its future growth. However, strong price performance and bullish sentiment indicate potential for a rally. The coming weeks will determine whether ADA sustains its gains or struggles to break key resistance levels.