As a seasoned crypto investor with battle-scars from the 2017 bull run and 2018 bear market etched into my portfolio, I can’t help but feel a mix of anticipation and caution when witnessing such spikes in trading activity for tokens like ADA. The surge in both futures and spot markets, with over $800 million in volume, is certainly eye-catching. However, the turnover to market cap ratio of 5.9% suggests a relatively normal level of trading activity, which is reassuring.
Today, there was a surge in trading activity for the native cryptocurrency of the Cardano blockchain, ADA, as indicated by CoinGlass data. This increase was due to a significant rise in the volume of perpetual futures contracts for ADA, which at one point jumped by 33%. After this spike, the daily trading volume of the Cardano token in this specific market reached over $450 million.
Currently, the scenario on the spot market isn’t significantly different. As per CoinMarketCap data, the volume of ADA on the spot market has surged by approximately 23.85% within the past 24 hours, nearly touching $350 million.
In summary, the trading volume for the Cardano token across both future and spot markets amounts to around $800 million during this specific timeframe. This implies that the rate of turnover relative to market cap is approximately 5.9%, suggesting a typical and non-extreme level of transactional activity.
Tug-of-Cardano
However, the spike in ADA trading means that market participants are paying more attention and volatility is increasing. The reason for the increase is probably the price performance of the Cardano token.
Over the past 24 hours, ADA‘s price has increased by 8.3%, which is significant. However, the crucial point to note is that it has now touched a significant resistance level at approximately $0.38.
Since 2018, this particular price has been significant due to two reasons. Firstly, after Cardano (ADA) was listed on Binance and witnessed a surge of over 60% within just two weeks, this exact figure represented the peak of that rally. Secondly, following this rise, it became an essential level to keep an eye on for ADA’s future price movements.
Should the Cardano token manage to surge past that point, we might witness another upward trend as the level transforms into a supportive foundation. However, if it fails to do so, the level could act as a barrier and a bearish outlook may persist.
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2024-08-22 19:20