For the first time in a few months, Cardano (ADA) traders’ profitability has fallen to a pitiful 5%. This troubling number comes after ADA’s value fell by 40%, raising concerns about the long-term prospects of this once darling of the altcoin market.
Cardano’s fortunes reached a pinnacle in early September 2021, crossing the $3 threshold, but have since fallen precipitously. Recently, ADA fell as low as $0.22 before briefly rising to $0.26. A startling 93% of ADA holders are still in a loss situation as a result of this value level, and only 2% are able to break even.
This harsh reality puts heavy pressure on the future of Cardano as a funding idea. If fewer traders are profitable, this might deter new buyers from entering the market, causing trading volumes to decline and, in turn, further restricting any possible value restoration.
Additionally, current investors, particularly those who entered the market at higher price points, may start to panic-sell their shares, further depressing the value. In fact, there is a real danger of a vicious cycle developing, with dropping prices leading to decreased investor confidence, which would then trigger fresh sell-offs and further value falls.
What then does the long-term ADA maintain? Although the short-term outlook seems dismal, it’s vital to remember the ground-breaking technology that underpins the Cardano project. When it comes to real-world software, its proof-of-stake blockchain technology, which was created for security, scalability, and sustainability, has a lot to offer.
However, the coming weeks and even months will undoubtedly be advantageous for Cardano investors, especially given the continuing legal struggle between the SEC and Binance, and Coinbase. Traders should use caution and make an effort to avoid unnecessary risks.