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Cardano (ADA) Transactions Volume Reaches Lowest Level Since January, Bounce Ahead?

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Mon, 24/10/2022 - 11:50
Cardano (ADA) Transactions Volume Reaches Lowest Level Since January, Bounce Ahead?
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According to data from Messari on-chain tracker, Cardano is facing a severe drop in network activity as its transaction volume dropped to a level unseen since January 2022. Such a strong drop could be the result of the most recent price action of ADA, and it desperately needs a bounce.

Sudden crash

The downtrend on Cardano is not something that would surprise anyone who works with the cryptocurrency market, as ADA remains one of the least profitable cryptocurrencies in the whole industry. However, the price action that began on Oct. 10 was not expected by the majority of the market.

Cardano chart
Source: Messari

The 21% crash corresponded with a noteworthy spike in volatility. Prior to the dump, Cardano has been moving in the usual manner: low volatility, some swings up and then continuation of the downtrend.

Almost a two-time spike in volatility caused a panic among retail investors that fueled the plunge, causing the biggest volume spike since the middle of September.

What happens next with ADA?

The massive plunge in transactional volume on the network could be a sign of fear among investors and a lack of activity in the ecosystem as a whole. With negative price performance, investors avoid making unnecessary transactions or stop their buying activities.

Related

Decentralized finance that provides a small percentage of the existing volume on Cardano becomes less popular as traders in fear tend to move assets to private storage rather than keeping funds on exchanges or DeFi platforms.

Luckily, ADA has been showing some bounce potential by gaining 9% to its value in the last four days, showing that bulls may still provide enough buying volume to push it back to pre-drop values.

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