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Cardano surges 88% to $1.33 amid market growth

Cardano surges 88% to $1.33 amid market growth

GrafaGrafa2024/12/04 10:00
By:Isaac Francis

Cardano’s (CRYPTO:ADA) price surged by 88.8% between November 18 and December 3, reaching a peak of $1.33, its highest price in nearly three years.

This rally coincided with broader market growth, which saw the altcoin market cap rise from $1.16 trillion to $1.52 trillion in the same period.

The surge in Cardano’s price came with a significant increase in open interest in ADA futures, which reached a new all-time high.

As of December 3, the total leveraged exposure in ADA futures amounted to $1.2 billion, which raised concerns about potential risks of cascading liquidations.

Despite this, the futures market for Cardano has shown relatively healthy signs.

The monthly futures premium for ADA stood at 17%, indicating that traders are maintaining a cautious optimism.

Cardano’s recent performance was part of a broader altcoin rally, with several cryptocurrencies experiencing notable gains.

However, the increase in futures open interest is not necessarily a sign of a strong bullish trend.

The demand for ADA futures is balanced with positions on the other side of the trade, and the perpetual futures funding rate for ADA has recently decreased after peaking at 6%.

The total value locked (TVL) in Cardano’s decentralised applications (DApps) ecosystem, however, remains relatively small at $685 million, raising questions about the sustainability of the rally.

While Cardano's performance in the futures market suggests positive sentiment, there is no clear indication that the rally will be sustained without significant growth in TVL.

The ADA market remains a key focus for traders as they weigh the risks and potential rewards.

As one analyst noted, “The surge in demand for ADA futures should not be viewed as inherently bullish or bearish,” and the focus should remain on the broader market developments.

At the time of reporting, the Cardano price was $1.21.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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