Originally published on: December 03, 2024
In a remarkable surge, Cardano’s ADA has jumped by 88.8% from November 18 to December 3, hitting a peak not seen in nearly three years at $1.33. This increase aligns with the overall uptrend in the altcoin market, which reached $1.52 trillion on December 3, up from $1.16 trillion on November 18.
During this 15-day rally, ADA saw an uptick in leveraged positions through futures contracts, sparking discussions among traders about whether the dip to $1.16 on December 3 presents a buying opportunity or could lead to potential liquidation risks.
Among the top-performing cryptocurrencies in the top 100 during this period were Cardano, Stellar (XLM), XRP, Algorand (ALGO), and IOTA, collectively dubbed the “dino coins rally” due to their history of boom-and-bust cycles.
Noteworthy about Cardano’s recent performance is the 37% surge in ADA open interest on derivatives exchanges, surpassing previous highs from October 2022. Leveraged long and short positions totaled 932.5 million ADA on December 3, equivalent to $1.2 billion.
While Cardano’s futures open interest stands strong, the market for BNB futures remains competitive despite having a larger market cap. Altcoins like Solana (SOL), Dogecoin (DOGE), and Avalanche (AVAX) have yet to reach their previous open interest peaks.
Monitoring the futures premium on monthly contracts can offer insight into trader sentiment. The 17% premium on Cardano futures relative to spot prices aligns with previous bull markets, indicating a healthy market sentiment.
Considering the perpetual contracts, funding rates for ADA futures spiked 6% per month initially before stabilizing around 2.2%, suggesting traders adjusted leverage levels to manage risk.
With the total value locked (TVL) on the Cardano network, which fuels demand for smart contract processing, remaining steady at $685 million, Cardano’s DApps ecosystem may have room for growth compared to rivals like Aptos and Avalanche.
As the funding rate and futures premium signal positive market conditions, the demand for ADA futures seems poised to continue driving the price surge without immediate risk of liquidations. Stay tuned for more updates on this exciting market trend.