Cardano’s Activity Drops Below 10K: Is ADA Losing Its Spark?

Cardano (ADA) has always been a top pick among crypto fans, recognized for its research-driven approach and bold vision. However, despite its strong foundations, the network is showing signs of struggle. In recent weeks, a key metric has caught attention, daily active addresses have remained stuck below 10,000, a red flag for a network that thrived on user engagement. 

Adding to this, ADA’s price has taken a hit, and investor sentiment appears to be cooling. With a declining derivatives market and large investors pulling out, the question arises: is Cardano losing its momentum, or is this just a temporary lull before a rebound?

A Drop in Active Addresses: A Warning Sign?

One of the best ways to assess a blockchain’s strength is by looking at its active addresses, which represent the daily user engagement on the network. For Cardano, this number has been disappointing. Since March 6, daily active addresses have struggled to stay above 10,000, even during minor price recoveries.

This signals a potential problem: either existing users are disengaging, or the network is failing to attract new participants. In contrast, other Layer 1 blockchains have seen some improvement in user activity, making Cardano’s stagnation even more worrying.

A declining user base could have long-term consequences, as lower activity means fewer transactions, reduced network security, and diminished appeal for developers building on Cardano. If this trend keeps going, ADA could find itself overshadowed in an increasingly competitive crypto landscape.

The Derivatives Market Shows Weakening Confidence

It’s not just spot market traders who seem uncertain about Cardano, futures traders are also stepping back. Open interest in ADA futures, which reflects the total value of outstanding contracts, has dropped by nearly 30% since March 3. Once sitting above $1.2 billion, it’s now struggling below $900 million.

This decline suggests that traders are less interested in taking leveraged bets on ADA, often a sign of waning confidence in short-term price action. Even more concerning, Coinglass data suggest that funding rates on exchanges like Binance and Bybit have been consistently negative, with some dropping below -0.10%.

Negative funding rates indicate that short sellers—those betting on ADA’s price going down, are dominating the market. This suggests that sentiment around Cardano is more bearish than bullish at the moment.

Whales and DeFi Investors Are Pulling Back

Another red flag is the shifting behavior of large investors, often referred to as “whales.” Addresses holding between $100,000 and $1 million worth of ADA have seen their balances shrink from $6.61 billion to $5.59 billion. Similarly, larger holders with $1 million to $10 million in ADA have also sold off over $1 billion in holdings.

At the same time, Cardano’s DeFi ecosystem has taken a hit. Its total value locked (TVL) in decentralized finance protocols has dropped from its all-time high of $708 million to $611 million, a 14% decline in just a week.

What’s Next for Cardano?

While these numbers paint a concerning picture, Cardano still has strong fundamentals and a committed community. To regain momentum, the network will need to spark renewed interest, either through new partnerships, ecosystem developments, or major updates that make ADA more attractive for investors and users alike.

If not, Cardano risks falling further behind its competitors, making recovery more difficult. The coming months will be critical in determining ADA’s future.