The Cardano price has struggled in the past few months. ADA, its native token, has dropped in the past four straight days and is trading at $1.2200. It has declined by 60% from its all-time high, meaning that holders have lost over $50 billion in value.
Cardano is one of the leading blockchain projects. Indeed, its $40 billion market capitalization makes it the seventh biggest cryptocurrency in the world.
However, for a long time, Cardano has been accused of being a ghost chain. A ghost chain is a blockchain project that has few or no developers building projects using its technology.
Cardano role as a ghost chain is mostly because of how the network was built. While it has been in existence in the past six years, it did not have smart contracts technology. As such, it was almost impossible for people to build apps on its platform.
This changed in the third quarter of 2021 when the developers launched the Alonzo hard fork as part of their Basho era. The hard fork introduced smart contracts and the capability of developers to build apps.
However, several challenges have emerged since then. For example, the number of developers building using the technology has been relatively small. Today, only a few projects have been built using Cardano. They are not even listed on platforms like DappRadar and DeFi Llama.
Second, while Cardano has a future, there are concerns that the industry is getting competitive. There are now many projects that can do what Cardano does. They include Terra, Solana, and Binance Smart Chain.
Most importantly, while Ethereum has its challenges, the developers are now testing with a faster version that will come out later this year. Therefore, there is a possibility that Ethereum will still be the main project for development.
The Cardano price decline is also in line with the performance of other cryptocurrencies. For example, in the past few months, most coins, including Bitcoin have all entered a double-bear zone. An asset is considered to be in a bear zone when its price drops by more than 20% from the highest level.
The current phase of the sell-off is mostly because of the ongoing regulatory concerns. In the past few months, more regulators have continued to flex their muscles in the industry.
The most recent is the Bank of Russia, which released a critical report on Thursday. The bank said that the country should ban all cryptocurrencies and mining. It pointed to the fact that mining was an energy-inefficient process. Also, it pointed to the rising risks of cybercrime and the fact that they were interfering with monetary policy.
Other regulators are circling the industry. For example, in the European Union, a regulator called for the banning of these coins.
Another reason why Cardano price has declined sharply in the past few months is that the monetary policy environment is under pressure. For example, the Federal Reserve is expected to end QE and hike interest rates.
Cardano price prediction
The daily chart shows that the Cardano price has been in a major bearish trend in the past few months. The coin has declined below the 25-day and 50-day moving averages. The Relative Strength Index (RSI) has started pointing lower. Therefore, the path of the least resistance for Cardano is lower. If this happens, the next key level to watch will be at $1. A move below $1 will mean that bears have prevailed, which will push it much lower.