Key Insights:
- Cardano’s price has dropped 40% since August, with a death cross pattern signaling potential further decline.
- Charles Hoskinson defends Cardano’s decentralized nature while addressing concerns like stablecoin adoption and TVL metrics.
- Midnight, Cardano’s new sidechain, aims to solve current issues by bringing secure contracts and increasing user engagement.
Cardano’s price has faced continued pressure, with the token dropping to $0.6100 on Saturday, November 1. This represents a significant 40% decline from its peak in August and a 53% drop from its December high. For investors who had put in $10,000 back in December, their holdings are now worth about $4,640, highlighting a challenging period for the network.
Recently, Cardano formed a death cross pattern on the daily chart. This pattern occurs when the 50-day and 200-day Exponential Moving Averages cross each other, often signaling potential further downside. The token has also struggled with a bearish pennant pattern, remaining below the Ichimoku and Supertrend indicators. As a result, many analysts predict further price declines, with the next target set at $0.5060, about 17.5% lower than its current value.
Criticism of Cardano’s Performance
Observers have pointed to a variety of factors contributing to Cardano’s struggles. A key criticism, echoed by an X user “BobbyJuice,” highlights six major issues. These include the absence of native stablecoins, low liquidity, minimal on-chain adoption, limited DeFi growth, and a lack of interoperability. Additionally, network congestion and negligible marketing efforts have contributed to the challenges facing the network.
In response to these criticisms, Cardano founder Charles Hoskinson issued a lengthy rebuttal. Hoskinson defended the network, particularly its decentralized nature, and refuted claims suggesting that the absence of major stablecoins like Tether (USDT) and USD Coin (USDC) was the reason for its price struggles. He emphasized that the total value locked (TVL) metric did not capture the billions of dollars’ worth of ADA staked on the network, a crucial factor in Cardano’s operations.
Moreover, Hoskinson pointed out that the daily active user count did not reflect the millions participating in staking, further underscoring Cardano’s involvement in the broader ecosystem.
Cardano’s Future Potential with Midnight
Looking ahead, Hoskinson expressed optimism for the future of Cardano, particularly with the launch of Midnight, its new sidechain. Midnight is designed to facilitate secure contracts and decentralized applications (dApps), and it has already secured over 80 partnerships with prominent companies like Brave, Alchemy, BitGo, and Anastasia Labs. Hoskinson believes that Midnight will address many of the platform’s current issues, leading to a higher TVL, greater user engagement, and the introduction of stablecoins to Cardano’s ecosystem.
Despite the ongoing price struggles, Cardano has not been inactive. Recently, the blockchain introduced the “Ouroboros Phalanx” upgrade, aimed at enhancing security. These ongoing developments indicate that Cardano is still actively working to improve its network and user base.
