Cardano revenue hits three-year low, facing Ethereum's rise: ADA price may be at risk

Cardano price closed May 2024 at $0.44, having lost 12% in the past 10 days. In this on-chain analysis, we will explore the key bearish factors that are causing ADA’s continued decline.
Cardano price breaks below crucial $0.45 support
Since the Ethereum ETF was approved, competing Layer-1 networks including Solana (SOL), Bitcoin (BTC), and Cardano have struggled to gain traction. Amid recent market events, retail investors have turned their focus to the Ethereum market to boost profits as the entire cryptocurrency market enters a consolidation phase.
This rare market dynamic is reflected in ADA’s recent price action.
Cardano ADA Price Chart | TradingView
Cardano price closed May 2024 at $0.44, down 14% from the monthly high of $0.51 on May 21. ADA price action over the past 10 days has coincided with the bullish momentum in the ETH market.
Cardano network revenue drops to 3-year low
However, the shift in investor preferences is not limited to speculative markets. On-chain data trends show that Cardano’s native DeFi protocol attracted significantly lower attention this week, which led to a decrease in network revenue.
The IntoTheBlock chart below tracks the daily fees collected on transactions conducted on the Cardano blockchain network. This provides insights into network activity and the income earned by network validators who stake their assets.
Cardano Price vs ADA Transaction Fees
As shown in the chart above, the Cardano network collected a total of 11,970 ADA in transaction fees on May 26, which is 63% lower than its 2024 peak of 32,480 ADA recorded in March. Notably, historical data shows that this is the lowest daily transaction fee recorded since 2021.
When a blockchain network sees such a dramatic drop in transaction fees, it indicates that the network is losing market share, leading to lower demand for its native products and services.
Additionally, as a proof-of-stake network, the decline in Cardano fees means less revenue generated for network validators to stake their assets to verify transactions and secure the network.
The drop in revenue could cause Cardano’s validators to start withdrawing their assets, shifting their focus to more profitable proof-of-stake protocols. If this happens, it could further exacerbate the downtrend in ADA’s price.
ADA Price Prediction: Reversal Movement Towards $0.40?
Cardano price has broken below the $0.45 support level twice in the past 48 hours. With transaction fees at a 3-year low, the bears look ready to drop the Cardano price to the $0.40 level in the coming days.
However, GIOM data from IntoTheBlock suggests that bears may face obstacles in the $0.43 area in the near term.
Cardano Price Prediction ADAUSD | IntoTheBlock
As can be seen from the above chart, 407,260 addresses purchased 3.83 billion ADA at the highest price of $0.43. If they remain open, the ADA price could stage an immediate rebound above $0.45.
However, as demand weakens as indicated by falling transaction fees, bears appear to be taking control, putting Cardano’s price at risk of an inevitable fall back to $0.40.
Alternatively, if the market develops a bullish trend, $0.46 could be the next important resistance level.
Disclaimer: This content is for informational purposes only and should not be considered financial advice. The opinions expressed in this article may include those of the author and do not reflect the views of The Crypto Basic. Readers should perform thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.