Is Cardano a Shitcoin? Examining the Bearish Sentiment
NAIROBI (CoinChapter.com) — Cardano is under intense market pressure. Data from Santiment shows it has the lowest sentiment in over a year. In contrast, XRP enjoys bullish sentiment. Cardano’s price has struggled, reflecting investors’ negative outlook.
Meanwhile, XRP thrives, highlighting the stark difference in market perception.
The decline in sentiment coincides with Cardano’s market cap falling significantly. From a peak of over $90 billion in 2021, it dropped to $15.9 billion on Wednesday. Despite a recent 40% rebound from its lowest point this month, Cardano remains 45% below its highest value this year.
Declining Interest and Value in Cardano’s Ecosystem
Developer and investor interest in Cardano appears to be waning despite the upcoming Chang update. The network hosts 35 active projects and 3,656 public GitHub repositories. Despite this, only 245 developers engaged with Cardano initiatives this week, marking a 20.63% drop from the previous month.
Additionally, the number of commits fell to 1,548, a 30.4% decrease over the same period.
Additionally, the amount of money locked in Cardano’s DeFi applications has decreased from a record high of 633 million ADA in December 2023 to 538 million ADA on July 17. Its total value locked (TVL) of $243 million is much smaller compared to newer blockchains like Base, Blast, Sui, Mode, and Aptos. This drop indicates that investors are losing confidence in Cardano’s ability to compete in the DeFi space.
Cardano also lacks major meme coins or decentralized exchanges (DEXs) that drive significant traffic and engagement. Minswap, its biggest DEX, handled less than $1 million in transactions in the past 24 hours, whereas Solana’s Raydium processed $851 million.
The disparity underscores the project’s struggle to maintain a competitive edge.
Low Staking Yields and Technical Challenges
Cardano’s challenges extend beyond market sentiment and developer interest. Its staking yield remains one of the lowest in the market, at less than 3%, according to data from StakingRewards. This low return makes it less attractive to investors seeking passive income through staking.
Technically, ADA/USD is struggling. The price remains below the 200-day moving average of $0.519, suggesting the ongoing recovery may be short-lived. The RSI at 59.48 indicates a neutral to slightly bullish sentiment, but the price needs to break above the 200-day moving average to signal a potential trend reversal.
The daily trading volume of ADA has also remained below $500 million since July 5th. In contrast, smaller meme coins like Pepe and Dogwifhat are handling over $700 million daily. This low trading volume highlights the lack of enthusiasm among traders.
Adding to the criticism, in Feb, BitMEX co-founder Arthur Hayes publicly labeled Cardano a “shitcoin” during a Twitter exchange with Cardano founder Charles Hoskinson. Hayes tweeted,
“Cause ur coin is a piece of shit man. I like u too man regardless of the price of $ADA. Just buy some $ETH and chill.”
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