Cardano (ADA) Under Pressure: What’s Causing the Price to Fall?

The crypto market has once again been shaken by selling pressure hitting Cardano (ADA). Over the past few weeks, ADA’s price has fallen sharply to its lowest level since the end of 2020. 

This condition has raised investor concerns and sparked a major question: why did ADA fall so deeply?

The decline was not only driven by broad market sentiment, but was also worsened by a security incident involving the Cardano ecosystem. 

At the same time, waves of leveraged liquidations and weak global crypto market conditions also accelerated the pressure on this asset.

Even so, on-chain data paints a more complex picture. Behind the sharp correction, several large investors appear to be continuing to accumulate ADA. So, what is really happening with Cardano right now?

Key Takeaways

• ADA price crashed to its lowest level since 2020 after an exploit involving around 16 million ADA.
• Leveraged liquidations and weak crypto market conditions worsened selling pressure on ADA.
• Despite the price drop, on-chain data shows accumulation by large investors and a decline in ADA balances on exchanges.

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ADA Price Drops to Its Lowest Level in Years

Cardano has gone through one of its worst periods in recent years. ADA’s price briefly fell to the US$0.139–US$0.149 area, marking its lowest level since December 2020.

Compared with the peak price of the previous bull cycle, ADA has lost more than 95% of its value. This has led many investors to question the asset’s short-term outlook.

From a technical perspective, the downtrend looks very strong. The price is currently trading well below major moving averages such as the 20-day EMA and the 200-day EMA. An important support zone in the US$0.20 to US$0.22 range, which had previously acted as a defense line, was broken in early June.

Since then, selling pressure has continued without any meaningful recovery.

Read Also: Cardano (ADA) Coin: How It Works and Its Function, Many People Don’t Know

Wallet Exploit Triggered Panic

One of the main factors behind the ADA crash phenomenon was the security incident involving SecondFi, a Cardano wallet previously known as Yoroi.

The development team confirmed that there were three different attacks that exploited weaknesses in the wallet creation system. As a result, around 16 million ADA were stolen from 374 user wallets.

The initial loss was estimated at US$2.4 million. However, according to blockchain security firm SlowMist, the total exposure could exceed US$20 million after the audit is completed.

Although that amount is relatively small compared with Cardano’s overall market capitalization, the psychological impact is very large. Security incidents often trigger investor distrust and accelerate selling, especially in a fragile market environment.

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Leverage Liquidations Deepen the Price Drop

Aside from the exploit incident, another factor explaining why ADA is down is the wave of liquidations in the derivatives market.

Within 24 hours after selling pressure increased, around US$1.8 million in ADA leveraged positions were liquidated. Most came from traders who had opened long positions expecting the price to recover.

When the price kept falling and broke support levels, exchange automation began closing those positions. As a result, a domino effect of additional selling pressure accelerated the decline.

This phenomenon has occurred several times throughout the month. Each time ADA approaches a new support area, leverage liquidations reappear and push the price down further than the market expected.

This is one of the reasons Cardano’s price movements look more aggressive than some other major crypto assets.

Read also Cardano (ADA) Price Could Rise to $1.9 Per Coin

Global Crypto Market Conditions Are Also Pressuring Cardano

Cardano’s decline cannot be separated from broader market conditions.

Bitcoin and most altcoins are still under pressure due to global economic uncertainty, interest rate policies, and declining investor appetite for risk assets.

When Bitcoin weakens, altcoins like Cardano usually experience deeper corrections because of their higher volatility.

In addition, many institutional investors are currently favoring the largest-liquidity assets such as Bitcoin and Ethereum, leaving less capital flow toward second-layer projects like Cardano.

This makes Cardano’s price even more vulnerable to negative sentiment today.

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Why Are Big Investors Buying While Prices Fall?

Although market sentiment looks bleak, blockchain data shows an interesting development.

On the same day the exploit news emerged, there was a large outflow of ADA from exchanges. This is generally seen as a sign of accumulation, as investors move assets into personal wallets for long-term holding.

That data suggests some market participants see the current correction as a buying opportunity.

In addition, Cardano has just launched Leios Testnet, one of its biggest technological developments designed to improve network scalability.

Leios is expected to significantly increase transaction capacity and strengthen Cardano’s position in next-generation blockchain competition.

This fundamental factor is why some investors remain optimistic even though prices are under pressure.

Read Also: Experts and Analysts: Could Cardano (ADA) Reach $2 Faster Than Expected?

Cardano Price Outlook After the Sharp Correction

From a technical perspective, ADA is currently in oversold territory. The Relative Strength Index (RSI) is below 30, which often signals that selling pressure has become excessive.

Some analysts are also seeing the emergence of bullish divergence, a condition where price prints a new low but momentum indicators start to improve.

If accumulation continues and the crypto market improves, ADA may retest the resistance area around US$0.17 to US$0.20.

However, if market pressure continues and Bitcoin weakens again, the risk of a drop toward the US$0.12 area remains open.

In other words, Cardano’s direction over the next few months will depend heavily on a combination of technical factors, market sentiment, and the network’s fundamental developments.

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Conclusion

Cardano is going through a challenging period. ADA’s price has dropped due to a combination of a security incident, leverage liquidations, and overall pressure in the crypto market.

Even so, not all indicators point to a negative outlook. Accumulation by large investors and the launch of new technology such as Leios show that some market participants still believe in Cardano’s long-term prospects.

For investors, the current situation is a reminder that volatility is an inseparable part of the digital asset market. Understanding fundamental factors and market risks is key before making investment decisions.

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FAQ

Why did ADA drop sharply?

ADA’s price fell because of a combination of a wallet exploit that caused millions of dollars in losses, leveraged liquidations, and pressure from overall global crypto market conditions.

Was Cardano hacked?

The Cardano network itself was not directly hacked. The incident occurred in the SecondFi wallet (formerly Yoroi), which had a security vulnerability that allowed around 16 million ADA to be stolen.

Can ADA price recover?

A recovery is still possible if market sentiment improves, Bitcoin strengthens again, and Cardano’s technological progress succeeds in rebuilding investor confidence.

What is Leios in Cardano?

Leios is a technology update aimed at improving Cardano’s scalability and transaction capacity so the network can become more efficient in the future.

Is ADA currently oversold?

Based on the RSI indicator, ADA is in oversold territory, meaning selling pressure has reached a relatively high level compared with its historical average.