- Impact of 200M Cardano Proposal on ADA Price
- Increase in Short Positions and Potential Losses
- Decline in Cardano Interest Amid Market Downturn
The price of ADA cryptocurrency is struggling along with the rest of the market, having dropped by 4.5% over the last 24 hours. The total crypto market cap is also down 1.7%, as most traders have turned bearish, anticipating a further decline.
Impact of 200M Cardano Proposal on ADA Price
The debate in the Cardano crypto community about the leaked request for 200 million ADA ($74.3 million) has evoked mixed reactions. The leaked proposal from the early morning of August 26 revealed that the venture capital organization 3UTxO planned to request the specified amount once Voltaire went live. One of the most vocal ADA advocates, Jaromir Tesar, published a detailed explanation of why there isn’t enough ADA in the treasury to dish out 200 million coins for a single proposal even if Cardano becomes decentralized. According to Santiment data, the Cardano inflation rate has dropped to 0.42%, the lowest since June 6.
Increase in Short Positions and Potential Losses
As data from the Coinglass Liquidation Map (LM) shows, futures traders have identified an opportunity to use short ADA. Currently, the cumulative short liquidity leverage is larger in contrast to longs. This imbalance suggests that the overall market is bearish on Cardano since traders anticipate that the ADA price will fall lower. A deeper analysis of the LM shows a huge sell wall (right side), around $0.379, while the buy wall is decreasing on the left side. The Cardano price may find some support between $0.355 and $0.367 and between $0.331 and $0.347.
Decline in Cardano Interest Amid Market Downturn
According to Coinalyze data, Cardano open interest (OI) increased by 5.27% while the price dropped by 4.5% over the last 24 hours, indicating traders are entering shorts. The ITB graph shows shorts building up, confirming that the price of Cardano is headed lower. It is also worth noting that Cardano Founder Charles Hoskinson emphasized that they postponed the Cardano hard fork upgrade to September 1 to allow more time for completing the necessary upgrades.
The leak of the 200 million ADA proposal has caused an intense community reaction and added pressure on the cryptocurrency's price. The increase in short positions and the overall market downturn are also contributing factors. Moving forward, market attention will be focused on developers' actions and changes in token supply and demand.
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