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Will the crypto market recover as the sell-off intensifies?

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Will the crypto market recover as the sell-off intensifies?

The crypto market crash accelerated on Saturday as the futures open interest dipped and liquidations soared to over $1.6 billion, the highest level in weeks. This article explores whether the crypto industry will recover as the sell-off intensifies.

Summary

  • The crypto market crash intensified on Saturday.
  • The drop continued as liquidations jumped to over $1.6 trillion.
  • The crash will likely continue and then recover later this year.

Why the crypto market crash is happening

The crypto market crash is being triggered by a few factors. One of the most notable ones is the fact that the odds that Donald Trump will attack Iran soon continued rising on Polymarket. These odds have now jumped to over 80%, with his armada nearing Iran.

Bitcoin (BTC) and other altcoins are dropping because such an attack will lead to higher oil prices and volatility in the financial market. This fear is notable now that Bitcoin’s role as a safe-haven asset have continued falling.

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The crypto crash is also happening as memories of the October 10 liquidation event remain. That event happened after Trump warned of potential tariffs against China. Since then, leverage in the crypto industry has largely disappeared, with the futures open interest moving from $255 billion to $113 billion. 

The other reasons for the ongoing crypto crash is that Trump appointed Kevin Warsh, an inflation hawk as the next Federal Reserve Chair. Market participants were expecting BlackRock’s Rick Rieder to be mentioned.

Will the crypto market recover?

The question among investors is whether the crypto market will recover in the near term. Tom Lee, the popular analyst and BitMine Chairman, believes that the ongoing crypto crash will end soon. He noted that historically, Bitcoin always emerges from major dives. 

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For example, Bitcoin dropped by over 30% between its highest point in March and its lowest point in August. It then rebounded and moved to a record high in November. It also plunged below $16,000 in December 2022 and then rebounded.

There are some potential catalysts for the crypto market to recover eventually. For example, the US dollar index continues falling, which often leads to more demand for risky assets. Also, the Federal Reserve will likely resume cutting interest rates soon.

Additionally, there are signs that Bitcoin and top altcoins have become bargains as their MVRV indicators have slumped. 

Therefore, the most likely scenario is where the crypto crash continues and then rebounds later this year.

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Crypto World

Why Cardano Investors Are Moving Assets to Self-Custody Now

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ADA Price


“Currently, a 10 billion market cap, this thing is not even worth $1 billion,” one X user argued.

The latest cryptocurrency market crash was brutal, sending Cardano’s ADA to multi-month lows.

Some analysts believe the storm may not be over, warning the price could nosedive by as much as 75% in the short term.

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The Bad Days for the Bulls Aren’t Over?

Several hours ago, ADA plunged to 0.27, the lowest level since August 2024. Currently, it trades at around $0.29 (per CoinGecko’s data), representing a 15% decline on a weekly scale.

ADA Price
ADA Price, Source: CoinGecko

The well-known analyst DrBullZeus claimed that the asset is now nearing “a must hold support zone” at the range of $0.24-$0.28. He thinks that breaking below that level could result in a price crash to $0.125 and even $0.075.

The popular trader Matthew Dixon also chipped in. He suggested that “technically speaking,” ADA has retraced in three waves since the local top seen towards the end of 2024. He outlined $0.24 as a “very important long-term support,” predicting that as long as it holds, the price could rebound.

“A break of support would be a serious concern,” he alerted.

Prior to that, Harmonic Trader predicted that in six months, ADA might trade under $0.10. “Currently, a 10 billion market cap, this thing is not even worth $1 billion,” they argued.

Time to Rally?

Despite ADA’s recent price decline, some other analysts remain optimistic that a resurgence could be on the way. One of them, using the X nickname “Lucky,” asked their almost two million followers whether they plan to increase their exposure to the token at current rates. The analyst also envisioned a potential pump to nearly $1 in the near future.

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LaPetite is also bullish. Several days ago, he forecasted that ADA is about to go “parabolic,” claiming that “huge announcements” concerning Cardano are coming soon.

The recent exchange netflows signal that a rebound could indeed be on the horizon. Data provided by CoinGlass shows that over the past days and weeks, outflows have significantly outpaced inflows. This means investors have been shifting from centralized platforms to self-custody, which in turn reduces immediate selling pressure.

ADA Exchange Netflow
ADA Exchange Netflow, Source: CoinGlass
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Aave Shutters Avara Brand and Family Crypto Wallet

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Aave Shutters Avara Brand and Family Crypto Wallet

Aave Labs says it is sunsetting its “umbrella brand” Avara in the company’s latest move to refocus on decentralized finance and simplify its branding.

Aave founder and CEO Stani Kulechov posted to X on Tuesday that Avara, a company encompassing projects including the Family crypto wallet and previously the social media platform Lens, “is no longer required as we go all in on bringing Aave to the masses.”

Kulechov said the Apple iOS-based Family crypto wallet was also being wound down as the team has “learned that onboarding millions of users requires purpose-built experiences, such as savings, rather than generic, open-ended wallet experiences.”

The move marks Aave’s latest effort to refocus on products such as its flagship lending protocol as the project handed stewardship of Lens to the Mask Network last month, with Kulechov saying Aave’s role in the protocol would be reduced to an advisory role so it can focus on DeFi.

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Source: Stani Kulechov

Kulechov said in his latest post that Aave was “now united as one team of world-class designers, engineers, and smart contract experts, aligned around a single mission: bringing DeFi to everyone.”

All future projects under Aave Labs

Avara said in a blog post that “all current and future products, including the Aave App, Aave Pro, and Aave Kit, will operate under Aave Labs” to simplify the brand.

It added that accounts linked to the Family wallets “will continue as core infrastructure within Aave Labs products,” but the iOS app would be wound down over the next year.

No new users will be onboarded to the app from April 1, and existing users can continue using the app until April 1, 2027, and will continue to have full access to their funds on Aave’s website.

Related: There is no trust in DeFi without proper risk management

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Aave is the biggest DeFi protocol with $30 billion in total value locked, nearly $9 billion more than the next largest project, the staking protocol Lido, which has $21.7 billion in value locked, according to DefiLlama.