Cardano’s native token, ADA, has recently fallen out of the top 10 cryptocurrencies by market capitalization, reflecting ongoing challenges in maintaining its market position. Since January, ADA has consistently lost market share, following a modest recovery from the 2022 bear market. Its current market cap now stands at $11.9 billion, positioning it behind TRON’s TRX, according to the latest data.
Broader Market Correction Intensifies ADA’s Decline
This drop in ADA’s ranking occurs amidst a broader market correction. Over the last 30 days, Bitcoin (BTC) has declined by 11%, exerting additional pressure on ADA and other altcoins. This market-wide downturn has contributed to a reduced risk appetite among investors, further weighing on ADA’s performance.
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ADA’s ongoing decline is driven by shifting market dynamics and weak investor sentiment. The Crypto Fear & Greed Index currently resides in the “Fear” zone at 28, highlighting the ongoing caution among investors. However, it is worth noting that this is a slight improvement from last week’s “Extreme Fear” level.
Cardano’s Network Activity Slows, Affecting Investor Confidence
Moreover, investor sentiment is further dampened by Cardano’s sluggish network activity. Despite being one of the early adopters of the proof-of-stake consensus algorithm, Cardano has struggled to gain a foothold in the decentralized finance (DeFi) space. According to DefiLlama, Cardano currently has only 23,807 active addresses, a significant contrast to Ethereum’s 350,000 and Tron’s 1.9 million. Additionally, the total value locked (TVL) on Cardano’s network is $178.07 million, representing less than 1% of the total DeFi market share. This low TVL ranking places Cardano at 29th among all blockchain networks, far behind top chains like Ethereum, Solana, and Tron.
Cardano’s market dominance has been declining steadily since the launch of its smart contracts in September 2021. At its peak, ADA traded around $3.00, driven by high anticipation of the launch. This excitement pushed ADA’s market cap to $77 billion, making it the fourth-largest cryptocurrency at that time.
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As of August 20, ADA trades at approximately $0.3364, reflecting a 0.73% decrease over the past day. Its market cap has also decreased by 0.74%, now standing at $12.09 billion.
The 24-hour trading volume is $202.55 million, with a volume-to-market cap ratio of 0.0168. This decline highlights the challenges Cardano faces in regaining its market position.
