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Cardano price tests $0.25 support as long liquidations mount, will it crash?

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Cardano price has moved back into a horizontal channel pattern on the daily chart.

Cardano price fell over 5% towards $0.25 on Thursday, paring off a part of its gains seen on the previous day.

Summary

  • Cardano price fell 5.7% to around $0.25 as a broader crypto market sell-off triggered profit-taking after the U.S. Iran ceasefire news.
  • Nearly $545K in long positions were liquidated over 24 hours, significantly outweighing short liquidations and adding downward pressure.
  • Whale wallets holding over 10M ADA rose to a four-month high, signalling continued accumulation despite recent price weakness.

According to data from crypto.news, Cardano (ADA) price fell 5.7% from $0.263 on Wednesday to $0.248 on Thursday morning before settling at the $0.25 mark.

This decline occurred amid a broader sell-off across the cryptocurrency market as investors booked profits after they sold the U.S.-Iran ceasefire news. Bitcoin (BTC), the bellwether asset, was down 1.2% below the $71,000 figure. Ethereum (ETH) fell by 3.4% while other major crypto assets, such as BNB (BNB), XRP (XRP), and Solana (SOL), were all in the red with even more significant losses.

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As Cardano price fell, it caught highly leveraged long traders off guard across the derivatives market. Data from CoinGlass show that nearly $545K worth of long positions were liquidated in the past 24 hours, which is nearly nine times the amount of short positions liquidated in the same timeframe.

Long liquidations occur when traders who bet bullish are caught by falling prices and are forced to sell their positions to cover their margins. When long liquidations significantly outweigh short liquidations, the asset’s price often faces intense downward pressure as the forced selling creates a cascading effect.

Despite this volatility, reports indicate that whales are still betting on the token to go up. Notably, data from Santiment shows that the number of whales holding over 10 million ADA tokens has hit a four-month high of 424 at press time. That represents a 5.2% jump over the past nine weeks, a clear sign that whales have been accumulating the token during these dips.

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As such, if the whale accumulation trend continues to gain strength, they could attract the attention of retail investors. This, in turn, could potentially change the course of ADA’s current price trajectory.

On the daily chart, Cardano price has entered a horizontal channel pattern where the price was previously trading since early February.

Cardano price has moved back into a horizontal channel pattern on the daily chart.
Cardano price has moved back into a horizontal channel pattern on the daily chart — April 9 | Source: crypto.news

The altcoin broke below the pattern earlier on March 29 as risk-on sentiment withered from the crypto market amidst geopolitical concerns at that time. However, the recent Cardano rebound back into the channel suggests that bulls are attempting to reclaim control.

While the Supertrend indicator still points to some lingering bearishness as it remains red, the MACD line points to a slightly bullish momentum with a bullish crossover while still remaining under the zero line.

For now, the two trendlines of the channel mark the key resistance and support areas for the token. As such, a break below the lower trendline at $0.24 could signal a deeper correction, while if bulls manage to push the price above $0.30, it could spark a fresh rally toward previous highs.

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Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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Crypto World

Crypto Exchanges Vie for TradFi Commodities Market, Pricing Gaps Remain

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Crypto Exchanges Vie for TradFi Commodities Market, Pricing Gaps Remain

Cryptocurrency exchanges are taking a growing market share from traditional finance (TradFi) trading venues through tokenized commodities products, but the mainstream adoption of tokenized precious metals remains limited by pricing and liquidity issues.

Silver perpetuals have reached about 40% of the equivalent volume of the Comex Silver (SI) Contract at their peak, the world’s largest silver futures market, which accounts for over 70% of global exchange-traded silver futures volume, according to a Thursday report from Binance Research.

During March and April, tokenized silver accounted for 14.90% and 14.98% of the Comex’s volume, respectively, up from just 1.37% in January.

The growth suggests crypto exchanges are capturing more demand for round-the-clock exposure to traditional assets, particularly in metals-linked perpetuals, but analysts at Kaiko said liquidity depth and price formation still pose major obstacles to wider adoption among traditional investors.

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Average Aggregated TradFi-Perps Volume to The Primary Futures Equivalents on Traditional Exchanges. Source: Binance Research

Crypto TradFi perps need reliable pricing, strong liquidity

Tokenized commodities offer 24/7 trading, which can create vulnerabilities compared to TradFi gold and silver futures, where the holiday and weekend close create “natural circuit breakers that actually protect market quality,” Kaiko research analyst Laurens Fraussen told Cointelegraph.

This exposes tokenized commodities to degraded order book debt, widened spreads and less reference pricing from closed traditional venues.

Legacy commodities offerings avoid these issues through centralized clearing, consolidated liquidity, standardized contracts and “coordinated operating hours that prevent liquidity deserts,” Fraussen said, adding that crypto needs “better chain abstraction and unified liquidity aggregation” to compete with TradFi.

Related: NYSE taps Securitize for 24/7 tokenized securities platform

Despite the infrastructure concerns, tokenized gold perps have surpassed the gold futures trading volumes of several regional commodity exchanges, a trend seeing monthly acceleration, according to Binance Research.

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Figure 3: Average Aggregated Volume of Gold-Perps to Gold Futures in Regional Exchanges, in March

Binance Research also said gold perpetuals outpaced several regional commodity exchanges in March, reaching 401% compared to gold futures trading on the Japanese energy commodities futures exchange TOCOM, 228% of India’s Multi Commodity Exchange (MCX) and 216% of the Dubai Gold & Commodities Exchange (DGCX).

Binance attributed part of this growth to “market-moving events” that routinely occur on weekends, which would leave investors exposed to gap risks through traditional venues operating under regular trading hours.

Magazine: Can Robinhood or Kraken’s tokenized stocks ever be truly decentralized?