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
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.
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.
