ADA Price Risks 10% Drop Amid $74M Controversial Proposal
ADA Price struggles along with the rest of the market, having dropped 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. Meanwhile, the Cardano community is in an uproar, as a leaked proposal revealed a request for 200 million ADA tokens. The backlash has been intense, as the incident adds salt to the injury of the postponed Chang hard fork upgrade.
Impact of 200M Cardano Proposal on ADA Price
The debate on the crypto X Cardano community about the leaked request for 200 million ADA ($74.3 million) has evoked mixed reactions from the community.
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.
CARDANO Back Room Grift
200 Million ADA at stake
note: It’s not about me, It’s about Us!pic.twitter.com/M3mndECDKC
— ESCO (@ESCOweb3) August 24, 2024
Jaromir Tesar, one of the most vocal ADA advocates, 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.
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
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. However, IntoTheBlock data shows that if the ADA price falls below that, over $2.3 billion worth of Cardano may be lost.
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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