Cardano (ADA) has been one of the worst-hit cryptocurrencies in the market. The digital asset which had seen a high of $3.10 now lives on past glory as it is now trading below the $1 mark. This has been going on for a while which has convinced some investors that the end of this onslaught is coming to an end. However, on-chain metrics suggest that this is far from the case and in fact, the downtrend is not close to ending anytime soon.
On-Chain Metrics Are Bad
One thing that has always gone well for Cardano has been the amount of activity that is recorded on the network. The cryptocurrency which boasts a cult-like following has been one of the best-performing networks in terms of activity and traffic. At some point even rivaling, or surpassing, the leading smart contract network, Ethereum, in terms of volume. But it seems this reign is coming to an end as Cardano’s network activity has slowed significantly.
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At the beginning of the month, Cardano’s real volume on a daily basis had surged as high as $750 million passing through the network in a day. However, as the price of the digital asset has declined and investor sentiment has turned negative, its real volume has taken a hit.
ADA real volume on a decline | Source: Messari
Snoop Dogg’s NFT launch on the network had helped to bolster activity on the network but this soon died down. The result of this has been a constant decline in real volume. At the time of this writing, the real volume for the network is now sitting as low as $37 million on a daily basis.
What This Means For Cardano
The price of any cryptocurrency in the space can easily be linked to the network activity of that asset. This is why the decline in the real volume for Cardano spells out more bad news for the value of the digital asset.
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A surge in this real volume has usually coincided with a surge in the price of ADA. What this alludes to is that with real volume down, with no signs of picking up soon, then there is not enough momentum to trigger another recovery trend for the cryptocurrency.
ADA falls below $1 | Source: ADAUSD on TradingView.com
Rather, as the real volume continues to decline, it is expected that the price of the digital asset will decline with it. This could see the value of ADA testing at the $0.7 level in the month of May. Although this has historically been a bullish month so there is a chance ADA will recover if the market does.
ADA is trading at $0.84 at the time of writing. The digital asset is down 72.52% from its September 2, 2021, all-time high.
Featured image from Zipmex, chart from TradingView.com