Cardano (ADA) Suddenly Drops 6%, What’s Happening?

Cardano (ADA), the eighth largest cryptocurrency by market capitalization, has unexpectedly dropped 6%, leaving market participants wondering about the reasons behind the sudden decline. The price drop contrasts with the broader crypto market, which is recovering from recent losses, with several cryptocurrencies trading in the green.

Bitcoin topped $90,000, while Bitcoin Cash (BCH), Chainlink’s LINK and Aptos’ APT all experienced major gains. The U.S. dollar index plummeted to its lowest level since early November, which may have boosted cryptocurrency prices.

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According to CoinGlass data, $227 million were liquidated in the last 24 hours, and short positions came in at $112 million.

At press time, ADA was down 5% to $0.93, having previously reached lows of $0.923. The drop might have been due to profit-taking, as some assets that had seen big gains earlier in the week were now trading in the red.

What’s happening?

The announcement that XRP, SOL and ADA, as well as Bitcoin and Ethereum, will be included in a strategic crypto reserve, sparked an instant crypto rally on Sunday, providing relief to an asset class coming off its worst month since 2022. Cardano surged as much as 72% in Sunday’s session, per TradingView data.

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Yet the inclusion of XRP, ADA and SOL was later met with questions from investors about the project’s merits. Macroeconomic concerns also recently took center stage, weighing on investor sentiment and pressuring risk assets like U.S. stocks and digital assets lower.

ADA plunged to lows of $0.75 on March 4, where it sharply rebounded. The recovery continued with ADA reaching highs of $1.02 in Wednesday’s trading session, where it encountered resistance. Cardano’s attempt to retake the $1 level in today’s trading session faltered, with ADA plunging into the red.

In related news, Cardano Founder Charles Hoskinson has commented on the inclusion of ADA in the strategic crypto reserve. Hoskinson indicated that he was unaware of ADA’s inclusion in the proposed crypto reserve until it was revealed. He further claimed that neither he nor any Cardano reps had received an invitation to the upcoming Crypto Summit as of yet.