Markets
Cardano (ADA) price at risk of reversing $0.40 if this happens
Cardano (ADA) price collapsed towards the $0.45 level on Tuesday, May 28, as Ethereum continues to dominate the short-term preferences of cryptocurrency investors.
Cardano Price Falls Further as Ethereum Dominates
Since the US Securities and Exchange Commission (SEC) approved Ethereum spot ETFs on May 23, global cryptocurrency markets have entered a phase of consolidation as investors await the official launch of ETH derivatives on the markets Americans.
However, as markets have entered a phase of consolidation, crucial market data trends show that many traders are redirecting capital away from Ethereum’s arch-rivals, such as Solana, Layer-1 Proof-of-Stake networks (SOL) and Cardano (ADA) and Avalanche (AVAX).
As a result, as Ethereum price continues to rise towards the $4,000 mark, Cardano’s price action has taken a negative turn.
As seen in the graph above, ETH price has accumulated a 25% increase over the past week, holding above the $3,800 support level as of this writing on May 28. But Cardano on the other hand is now down 12% within the weekly period, while falling towards the $0.45 mark level.
However, digging deeper, recent movements in the Cardano derivatives markets suggest that investors are anticipating a further pullback in the ADA price in the coming days.
Coinglass settlement map data shows that SHORT speculative traders are now dominating Cardano markets and placing unusually high leverage bets against ADA.
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Looking at the chart above, Cardano SHORT traders have implemented an $11.91 million leveraged short contract around current prices. Meanwhile, bullish traders only quoted $5.9 million LONG contracts.
When the value of leveraged SHORT contracts exceeds LONG ones, it suggests that more traders are betting on a decline in Cardano’s price. This may be due to widespread sentiment that Ethereum’s growing market status due to the approval of the ETH ETF could lead to reduced traction for its rival L1 networks.
If long Cardano traders continue to close their dwindling positions instead of making hedging spot purchases, ADA price could be at risk of losing the critical support of $0.45, falling towards $0.40 in the coming days.
Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinion of The Crypto Basic. Readers are encouraged to do thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.
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