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Wednesday, January 19, 2022

Cardano Futures Inches Closer To $1B With Price Crash Possibility

The price crash of Cardano (ADA) had taken place the previous time right after the open interest of futures had successfully managed to hit $1 billion. As a result, the traders are now questioning the possibility of another price crash this time as well.

Cardano had made a gain of a staggering 816% in 2021. This resulted in the platform reaching a massive $61 billion market capitalization through smart contracts. In order to totally understand the extent of the 3rd generation protocol, Ethereum which is an absolute leader also had a similar valuation only 6 months ago.

New Price Journey For Cardano

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The derivatives markets have simultaneously evolved with the price of Cardano. On the other hand, the open interest of futures is quickly inching closer to $1 billion. This is creating a possibility of a threat as well as an opportunity for a price crash.

The investors who are cautious have started questioning if $200 billion has the potential of liquidations. Similar conclusions are drawn of a 23% crash which has taken place on 17th April.

Decentralized finance has certainly been driven to an upward rally of smart contract-based cryptocurrencies. Alongside the network of ETH is spiking the median fees over $35. This is making the investors look for other alternatives.

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Cardano’s price reached its all-time high of $1.97 on 13th May due to the futures interest and driven it to $940 billion. Since the volume of ADA futures rarely exceeds $4 billion, the number of open interests is very impressive.

The funding rate of 0.30% every 8 hours is almost 6.5% weekly, which makes it a big burden for the people carrying the long positions.

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