Cardano has experienced a significant rebound in the past three days, reversing the bearish trend that caused ADA to lose 29% of its value in just three weeks, reaching a low of $0.45. However, despite this recovery, Cardano has yet to regain its market interest. Its funding rate remains unimpressive, its RSI struggles to surpass the halfway mark, and the supply of ADA in profit is declining.
Cardano’s ADA had a difficult start to the year. On January 2nd, it reached its highest price for 2024 at $0.6317 after an impressive rally in December. However, since then, it has been on a bearish run, losing 29% and hitting a low of $0.45. Over the past three days, there has been a recovery that experts believe could set the stage for a better performance in February.
Currently, ADA is trading at $0.4874, experiencing a 1% loss in the past day. Its market cap stands at $17.26 billion, making it the eighth highest in the crypto market. While data shows a 2% loss over the past week, a closer look reveals a different story. ADA started the week at $0.4968 but quickly dipped to a monthly low of $0.4501 on January 23. Since then, the token has been on a recovery, reaching a new weekly high of $0.4985, marking a 10.7% gain in five days.
During this time, some on-chain metrics have also improved. The relative strength index currently stands at 53, an increase from an average of 40 in the past day, indicating a gradual return of investor confidence in ADA.
However, despite the recovery, investors remain skeptical about ADA’s long-term potential. Trading volume has dipped by 6.2% in the past day, reaching its lowest point in the past week at $290 million. The funding rate has remained relatively unchanged throughout the month, and while the bulls still seem to be in control, they are not as aggressive as they were in December. This lackluster demand is also reflected in the open interest, which has barely moved over the past two days, remaining at $208 million.
Additionally, other metrics do not portray Cardano in the best light, such as the percentage of ADA supply in profit. Although this figure has slightly recovered from its December peak of 70% to 60%, it still raises concerns.
Looking ahead, despite the unimpressive price, Cardano’s ecosystem continues to experience significant growth. The DeFi space, in particular, has been thriving, with a total value locked of $334 million at present. This represents a 318% growth over the past year, driven by platforms like Indigo and Minswap. Another newcomer, MuesliSwap, has seen a 70% increase in users in just one week.
In another exciting development for the Cardano community, Fluid Tokens has released an implementation of the new native Cardano standard for ERC20 tokens. This implementation allows tokens like USDC and other Ethereum tokens to be issued on the Cardano network without any changes to the blockchain.
Overall, while the price may not be impressive at the moment, Cardano’s ecosystem and the growth of its DeFi space provide reasons for optimism.