- The total value locked on the Cardano network has tumbled by as much as $85 million in May.
- ADA continues to bleed under the bearish trend of the crypto market.
- Continued selling puts ADA at risk of further losses to $0.288.
Cardano’s native token ADA was trading 6% below Thursday’s close at $0.478 as extreme fear gripped the wider crypto market. ADA lost crucial support levels and was at risk of plummeting further unless bulls buy at lower levels and stage a comeback.
Meanwhile, Cardano’s total value locked (TVL) continued to decline due to decreased investor interest in its dApps and a broad market-wide correction. Cardano has been fighting for its fair share of the decentralized finance (DeFi) market after the successful upgrade of the Alonzo hard fork in September 2021.
According to data from DeFi Llama, the Cardano network lost approximately $211 million in TVL since reaching record highs of around $320 million on March 24, as shown on the chart below. This figure stands at $115 million at the time of writing this article.
Total Value Locked On Cardano
This drop in TVL could be attributed to the decrease in liquidity of the protocols built on the platform. For instance, decentralized exchange (DEX) platform WingRiders has tumbled more than 50% in May, while another DEX MinSwap has also dipped more than 38% over the same period.
This is weighing on ADA, which was trading at $0.459, 45% below its price a month ago.
ADA Price Analysis
The buyers failed to defend the psychological level at $0.50, which they had held for the past few days, indicating buying weakness. The bears will now try to push ADA below the $0.40 psychological level.
If they succeed, the token could drop further towards the $0.383 swing low. The bulls are likely to aggressively defend this level. If the subsequent decline to $0.383 is not arrested, it would suggest a continuation in the sentiment favoring the downside.
The moving averages were facing down and the Relative Strength Index (RSI) was positioned in the negative region. The price strength at 32 suggested that the sellers still had the upper hand, adding credence to a continued downtrend. As such, increased selling pressure from the current levels could push Cardano’s price towards the $0.288 support floor.
ADA/USD Daily Chart
On the upside, a daily candlestick close above $0.50 would indicate the inability of the sellers to defend the lower levels. This could see the price rise first toward the $0.50-psychological level and later to the $0.744 level embraced by the 50-day simple moving average (SMA).