Cardano’s ADA has seen one of the worst start to the year since it was launched.
The coin has consistently traded above $1.00 even during extremely bear markets with occasional dips below this level. This price level has consequently been established as a psychological support for a while now.
However, this month, the coin has come under immense pressure by the prevailing bearish forces. Over the weekend, ADA plunged below $1.00 and has since failed to retest this level. Market analysts previously warned that the $1.00 mark could turn into a resistance level which couldn’t be any truer for Cardano, looking at its recent trading activity.
Despite ADA’s price struggle, Cardano has continued posting optimistic performances in other market aspects. Most notably, its transaction volume has been on an uptrend, eclipsing closer rivals like Ethereum.
Cardano tops Ethereum in transaction volume
Cardano’s transaction volume has been on the up in recent weeks and has more than once flipped market leaders as the chain with the most transactions in 24-hour periods.
Data provided by market intelligence firm Messari indicates that Cardano recorded $12.69 million in transaction volume in the last 24 hours compared to Ethereum’s $6.38 billion. This places Cardano at second place, just behind market leader Bitcoin, whose 24-hour volume is currently $39.38 billion.
Cardano transaction volume. Source: Messari
The month of February has recorded some of the highest transaction volume counts seen on Cardano since last September (when the network saw a $138 billion historic summit). On February 14, the transaction count clocked $35.14 billion and more recently, on February 19 reached $31.13 billion.
The SundaeSwap effect
The rise in transaction volume has been ascribed to the launch of the SundaeSwap project on Cardano. The decentralized exchange caused massive congestion on the network because of an overload of transaction activity by users involved in the swapping and yield farming options the exchange offers.
A spike in transaction count resulted in a subsequent rise in Total Value Locked (TVL) in this liquidity provision protocol, which peaked at $126.89 million last Sunday. This figure was an indication of the massive influence of SundaeSwap on the network, as the total TVL of all on-chain protocols was $129.53 million on that day.
According to Cardano Blockchain Insights by Google, the number of transactions recorded on Cardano has scaled significantly from 5,527,828 on 28th March 2021, to 32,201,060 on 22nd February 2022.
Ethereum and Bitcoin have been sluggish
Cardano’s surge has also been supported by the non-performance of the top two digital asset tokens, which have been sliding downwards in transaction activity for a while now. Closing yesterday, Ethereum was down 77% from its three-month peak recorded on December 4 – from $21.3 billion to $6.38 billion yesterday.
Bitcoin has also not been performing well. From $116 billion worth of transaction volume on 25th November, the Bitcoin network is now seeing transaction volumes down 66% from its three-month peak. All this while Cardano reached a three-month high ($35.14 billion) last week on Monday.
However, Cardano lags the top two tokens in terms of the number of users. While Ethereum and Bitcoin have about 76.07 million and 40.32 million on-chain addresses, respectively, Cardano is only at 3.43 million for this metric.
Cardano is beating the top two in fees efficiency
Whether undervalued or underperforming, Cardano’s native ADA token has so frequently not represented the on-chain growth observed. As expected, there has been comments suggesting that ADA could collapse altogether.
Critics have gone as far as branding it vapourware for its price inactivity, but the network is showing its importance more so since it recently beat both Ethereum and Bitcoin in the 24-hour adjusted transaction volume recorded on 13th February. Messari data indicated that Cardano saw transaction activity worth $17.15 billion, which left Bitcoin second-placed with $15.1 billion worth, and Ethereum settled for third with volume amounting to $8.6 billion.
Furthermore, Cardano showed comparatively better fees efficiency over the said period. Its users only incurred $51,985 in fees, far below the amounts charged by Ethereum and Bitcoin – $19.4 million and $0.51 million, respectively.
Cardano (ADA) market performance
ADA/USD is back above $0.90 after a worrying crash that saw it touch $0.82 yesterday for the first time since the second week of February in 2021. Although the downtrend corresponded to the general market movement, it still raised concerns among holders. Having lost support at the critical $1.00 at the end of last week, ADA finds itself in a tough position to retest this level.
ADA/USD extended (since 20221) trading chart. Source: CoinMarketCap
ADA is currently trading at $0.91 and though it’s up by 9.77% in the last 24 hours, the extended trading chart shows it is 16.68% off its mark seven day ago. It is also 70.48% below its September all-time high as per CoinMarketCap data.
The cryptocurrency market has found its footing on Wednesday with majority of the tokens being on a recovery. However, the outlook for the seventh-largest cryptocurrency by market cap is largely bearish. A climb above $1.00 will, however, invalidate this thesis.
To learn more about this token visit our Investing in Cardano guide.
The post Cardano Sees Rising Transaction Volume, But ADA Token Crashes Further appeared first on Securities.io.
