In a tumultuous week for the cryptocurrency industry, the broader crypto market experienced unprecedented volatility following regulatory actions taken by the U.S. Securities and Exchange Commission (SEC)…
In a tumultuous week for the cryptocurrency industry, the broader crypto market experienced unprecedented volatility following regulatory actions taken by the U.S. Securities and Exchange Commission (SEC) against major players Binance and Coinbase. These actions have sent shockwaves throughout the industry, causing a wave of uncertainty and triggering significant price drops.
Still, even though declines were seen in the wider market, some altcoins have taken a particularly bad beating, one of them being Cardano’s native token, ADA.
At press time on Friday, June 9, ADA was trading at $0.31, down 3.55% on the day. Over the week, the altcoin fell more than 15%, plunging from $0.37 to its current level. ADA now faces a critical support zone at $0.30, which, if breached, could push the crypto token further down to as low as $0.27.
As a result of this notable decline, ADA lost more than $2 billion in its market cap in the past 7 days.
83% of ADA holders now in red
Data by blockchain intelligence firm IntoTheBlock shows that 83% of ADA holders (3.67 million addresses) are currently in the red, as a result of the recent slumps.
Meanwhile, on June 8, Finbold tapped the machine learning algorithms at PricePredictions to offer a prediction on ADA’s price for the end of June. The algorithm set the price for ADA for June 30, 2023, at $0.307, which, if materialized, would imply a notable price slump of more than 3.2%.
Meanwhile, despite the price drop, ADA saw a drastic surge in network activity recently, propelling the number of staked tokens to a new all-time high of more than 500 million.
Why is ADA falling sharply?
Apart from the aforementioned broader market woes, there are some specific factors that led to additional selling pressure on Cardano’s token.
Namely, after its legal actions against the world’s top two crypto exchanges, the SEC added ADA to the list of cryptocurrencies it deems securities. The Cardano Foundation opposed the regulator’s claims, sparking fresh uncertainty around the altcoin’s fate and thereby adding further pressure on ADA investors.