Cardano’s DeFi Adoption Skyrockets as Decentralized Exchange Volume Surges
Cardano’s decentralized exchange (DEX) trading volumes have soared, with trading volume exceeding $350 million and DEX trading volume surpassing 50 million ADA within a 24-hour period. This surge reflects a growing interest in decentralized finance (DeFi) applications on the Cardano blockchain, indicating increased network adoption and utility.
However, despite the surge in DEX volumes, other network metrics present a contrasting picture. Data analysis by COINOTAG, utilizing Artemis’ data, reveals a decrease in the number of daily active addresses on the Cardano network, dropping from 39,300 to 31,000. Daily transactions also significantly declined from 94,000 to 49,500. This discrepancy suggests that while trading activity has intensified, overall network engagement has decreased.
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Overview of the On-chain Data
On-chain data shows an increase in the velocity of ADA transactions, indicating higher trading frequency, but it also indicates a persistent negative MVRV ratio. This suggests that most ADA holders are currently unprofitable, potentially indicating room for price growth as holders may await profitability before selling their holdings.
Moreover, a significant decline in the Long/Short ratio suggests an increase in new addresses holding ADA, which could lead to heightened selling pressure if market volatility rises. This presents opportunities and risks for ADA’s future performance.
Despite ADA recently trading at $0.444, experiencing a 1.89% increase in the last 24 hours, its overall trend remains bearish, characterized by a series of lower lows and lower highs. The Relative Strength Index (RSI) for ADA has risen in recent days, indicating growing bullish momentum that may drive further price increases if sustained.
Final Thought and Conclusion
In a nutshell, while the surge in Cardano’s DEX volumes signals growing interest in its DeFi applications, declining network activity and a bearish price trend should be considered. On-chain data suggests potential for future growth, particularly if ADA holders hold out for profitability, but the influx of new addresses may introduce selling pressure amid market volatility. Investors and stakeholders should exercise vigilance, balancing optimism with caution as they navigate ADA’s evolving landscape.
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