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Cardano’s (ADA) price has been struggling in recent days, mirroring the broader cryptocurrency market’s downturn. The total crypto market cap has also experienced a decline, as traders adopt a bearish sentiment, anticipating further price drops.
Adding to Cardano’s woes is a leaked proposal that has ignited a heated debate within the community. The proposal, which was revealed on August 26, suggested that the venture capital organization 3UTxO was seeking 200 million ADA tokens ($74.3 million) once the Voltaire upgrade went live. This request has sparked significant backlash, particularly from prominent ADA advocates like Jaromir Tesar, who have argued that the Cardano treasury simply does not have enough ADA to allocate such a substantial amount for a single proposal.
Impact on ADA Price
The leaked proposal has undoubtedly contributed to the downward pressure on ADA’s price. While the Cardano inflation rate has dropped to a low of 0.42%, the request for 200 million ADA tokens would have had a significant impact if it had gone unnoticed and received approval.
Furthermore, the postponement of the Cardano Chang hard fork upgrade to September 1 has also dampened investor sentiment. The delay has created uncertainty and may have contributed to the selling pressure on ADA.
Also Read: Cardano’s (ADA) Lambo Tank – How Hydra Achieves 1M TPS While Maintaining Fort Knox-Level Security
Short Positions on the Rise
As the ADA price continues to decline, futures traders are increasingly betting on further price drops. Data from the Coinglass Liquidation Map (LM) shows that the cumulative Short liquidity leverage is significantly larger than the Long liquidity leverage. This suggests that the overall market is bearish on Cardano.
Additionally, the LM reveals a large sell wall around $0.379, while the buy wall is shrinking. This imbalance indicates that the ADA price may face resistance at the $0.379 level. If the price breaks below this level, it could trigger a significant sell-off, potentially leading to losses of over $2.3 billion.
Cardano is currently facing a double whammy: a declining price and a community divided over a controversial proposal. The combination of these factors has created a challenging environment for ADA investors. As the market continues to evolve, it remains to be seen whether Cardano can recover from its recent setbacks and regain its momentum.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
With a keen eye on the latest trends and developments in the crypto space, I’m dedicated to providing readers with unbiased and insightful coverage of the market. My goal is to help people understand the nuances of cryptocurrencies and make sound investment decisions. I believe that crypto has the potential to revolutionize the way we think about money and finance, and I’m excited to be a part of this unfolding story.
