As a seasoned crypto investor with over a decade of experience in this dynamic market, I must say that the recent turn of events surrounding ADA has left me both intrigued and slightly concerned. The leaked proposal for 200 million ADA tokens, coupled with the postponement of the Chang hard fork upgrade, has certainly stirred up a storm within the Cardano community.
The price of ADA is dipping, much like other cryptocurrencies, with a decrease of 4.5% in the last day. The overall crypto market value has also dropped by 1.7%. Many traders are becoming pessimistic, expecting prices to fall even more. However, the Cardano community is upset because a proposal for the allocation of 200 million ADA tokens was leaked. This incident comes on top of the delayed Chang hard fork upgrade, causing quite a stir among the community.
Impact of 200M Cardano Proposal on ADA Price
In the crypto world, particularly within the Cardano community, the emergence of a supposedly leaked request for 200 million ADA (equivalent to around $74.3 million) has sparked a wide range of responses among its members.
On August 26, at the break of dawn, a leaked plan suggested that the venture capital group, 3UTxO, intended to ask for the designated sum when Voltaire becomes operational.
CARDANO Back Room Grift 200 Million ADA at stake note: It’s not about me, It’s about Us!
— ESCO (@ESCOweb3) August 24, 2024
Jaromir Tesar, who is known as one of the strong advocates for ADA, recently provided a comprehensive rationale explaining that even if Cardano were to become fully decentralized, there may not be enough ADA in the treasury to distribute 200 million coins for a single proposal.
Based on Santiment’s findings, the inflation rate for Cardano has fallen to its lowest point since June 6, sitting at 0.42%.
Meanwhile, Cardano Founder Charles Hoskinson emphasized that they postponed the Cardano Chang hard fork upgrade to September 1 to allow more time for completing the necessary upgrades. If the proposal went unnoticed and received approval, it would have negatively impacted ADA Price, which is down for the day only because the entire market is retracing.
Shorts are Increasing, $2B at Risk of Loss
According to data from the Coinglass Liquidation Map (LM), it appears that futures traders are seeing a chance to short ADA. The total amount of short liquidity at this moment is more substantial compared to long positions. This discrepancy indicates that the broader market may hold a bearish view towards Cardano, as traders predict that the price of ADA could drop further due to this imbalance.
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.
As an analyst, I’m observing potential support levels for the Cardano price. These could be found between approximately $0.355 and $0.367, as well as between $0.331 and $0.347. However, it’s crucial to note that if the price of ADA were to drop below these levels, roughly $2.3 billion in Cardano could potentially be at risk.
According to Coinalyze, the Cardano open interest (OI) increased 5.27% while the price dropped 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.
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2024-08-27 06:06