Hafez Financial Services


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Probability of falling prices with increasing Cardano (ADA) future Trades


 ADA’s price crashed the last time its futures open interest reached $1 billion, leading traders to question whether or not it is about to happen again.

The impressive 816% gain of Cardano’s ADA coin in 2021 catapulted the smart contract platform’s market capitalization to $61 billion.

As ADA’s price evolves, so do its derivatives markets, and the nearly $1 billion in futures open interest poses both an opportunity and a threat for the price.

These high funding levels are unusual, and it won’t take much to trigger stop orders. However, the current funding rate is close to zero on most exchanges, indicating a balanced use of leverage on the buy side and sell side. This means that even as open interest surges, there are no signs that the derivatives market will cause an ADA price crash.

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