Following an unexpected 6% loss, Cardano (ADA), the eighth-largest cryptocurrency by market capitalization, has left market participants asking what caused the abrupt plunge. With a number of cryptocurrencies trading in the green, the price decline stands in contrast to the larger cryptocurrency market, which is rebounding from recent losses.
While Bitcoin Cash (BCH), Chainlink's LINK, and Aptos' APT all saw significant increases, Bitcoin itself surpassed $90,000. The price of cryptocurrencies may have increased as a result of the U.S. dollar index falling to its lowest point since early November.
Data from CoinGlass shows that short positions totaled $112 million and $227 million were liquidated in the past day.
ADA had earlier hit lows of $0.82 and was down 6,57% to $0.87 at the time of writing. Given that several assets that had experienced significant gains earlier in the week were now trading in the red, the decline may have been the result of profit-taking.
An asset class that had just experienced its worst month since 2022 was given respite on Sunday when it was announced that XRP, SOL, and ADA, along with Bitcoin and Ethereum, will be included in a strategic crypto reserve. According to TradingView data, Cardano increased by up to 72% during Sunday's session.
However, investors eventually questioned the project's advantages after XRP, ADA, and SOL were added. Recently, macroeconomic issues have also gained prominence, affecting investor sentiment and driving down risky assets like digital assets and U.S. stocks. On March 4, ADA fell to a low of $0.75 before experiencing a significant recovery. ADA continued to rise, hitting highs of $1.02 during Wednesday's trading session before running into resistance. ADA fell into the red as Cardano's attempt to regain the $1 mark during today's trading session failed.
Charles Hoskinson, the founder of Cardano, has offered his thoughts on the addition of ADA to the strategic crypto reserve in related news. Hoskinson stated that until it was disclosed, he was not aware that ADA was part of the intended crypto reserve. He added that as of right now, neither he nor other Cardano representatives have been invited to the forthcoming Crypto Summit.