Cardano has been on the downside since ADA reached an all-time-high of $3.10 back in September 2021. As of writing, the 9th top crypto has dropped 5% in the last seven days. In comparison, major cryptocurrencies like Ethereum lost over 4.5%, and Bitcoin shed 2% in the same timeframe.
However, CoinMarketCap displays a rise in trade volume from $221,898,095 to $277,239,103, which represents an increase of over 25%.
Nonetheless, as the price of ADA continues to decline, this could be the beginning of something else for Cardano.
Macroeconomics At Play
In response to persistently strong inflation in the United States, the Federal Reserve had to increase interest rates by 50 basis points, taking it from 4.25% to 4.50%.
Despite the fact that inflation has been prevented from fully exploding since the Fed’s prior rate hikes, they still intend to boost interest rates to 5%, which could be a problem for Cardano investors.
ADA total market cap at $9.8 billion | Chart: TradingView.com
Since the central bank’s interest rate hike, ADA’s price has broken through the $0.3 support level, however it failed to keep the momentum and is now trading at $0.28. This significant price decline suggests that the rumored Ethereum-killer might be losing its aggressiveness.
Cardano’s TVL is only $71.05 million, compared to Ethereum’s $23.4 billion. Additionally, NFT sales on the ecosystem have decreased, exerting additional downward pressure on ADA’s price.
On Optimism & Following The Right Path
Despite the confluence of these events, the leaders of Cardano appear optimistic about the future.
Jerry Fragiskatos, chief commercial officer at Input Output Global, stated in an interview with crypto space influencer Scott Merkel that he believes Cardano is following the right path.
“I think time will tell, and I think we’re taking the right approach,” he said.
In addition, he compared the ecosystem’s dire state to the corporations that survived the dot-com bubble. This comment relates to analogies between the demise of FTX and the dot-com era of the early 2000s.
He also discussed the manner in which ADA tokens are distributed to investors, highlighting the fact that there are few whales and ecosystem insiders.
As Fragiskatos stated, only time will tell if ADA survives the current bear market.