Cardano is currently experiencing a slowdown in growth, as highlighted by recent data from IntoTheBlock. Despite maintaining a stable active user base, the platform has struggled to attract new users, with its user addresses remaining stagnant at approximately 4.45 million for nearly a year. This stagnation comes as competitors like Solana and Base are drawing increasing attention from new users.
In August, Cardano’s development activity has also seen a significant decline. The number of code commits dropped by 74.5% month-over-month, from 1,330 in July to 338 in August. The number of core developers involved has decreased by nearly 9%, bringing the total to 95. This slowdown contrasts sharply with Ethereum’s development progress, which saw a 14% increase in code commits over the last 30 days.
The decline in Cardano’s development activity is notable against the backdrop of the Chang hard fork, which was intended to enhance node coordination. Despite these efforts, the reduction in development activity raises concerns about the platform's future innovation and growth.
Solana has emerged as a significant competitor, with its active address count increasing nearly fourfold in 2024. On August 6, Solana added approximately 300,000 new non-vote addresses, showcasing its growing appeal. This competitive pressure is contributing to Cardano’s difficulties in attracting new users.
Despite the challenges, Cardano has managed to maintain its transaction count and active user base since April. The network reports a daily on-chain volume of $7.2 billion and a low network value to transactions (NVT) ratio of 2.62. Additionally, ADA held by long-term holders has reached an all-time high, with 40% of the total supply now in long-term possession.
However, ADA’s price has suffered a significant decline, falling nearly 23% in the past 30 days. After a brief recovery, ADA remains down about 90% from its record peak of $3. The price, which surpassed $0.70 in March, has now dropped to around $0.30, representing a 60% decrease.
Amidst the downturn, there are signs of potential recovery for ADA. Crypto influencer Bitcoinsensus has identified a bullish pennant pattern on the charts, which often precedes a breakout following a consolidation period. The relative strength index (RSI) has also shown signs of reversal from the oversold zone, stabilizing at 40 over the past three days. If the RSI continues to rise with bullish momentum, there may be a potential for ADA’s price to recover.
Cardano’s current slowdown in growth and development activity presents challenges as it navigates a competitive crypto landscape. While the platform maintains strong transaction volumes and long-term holder engagement, the decline in new user adoption and development activity raises questions about its future trajectory. The potential for price recovery, driven by technical indicators and market patterns, may offer hope, but investors should remain vigilant of the ongoing competitive pressures and development dynamics influencing Cardano’s performance.
August 2024, Cryptoniteuae