ADA Drops 6% Amid Cardano’s $100 Million Treasury Allocation Debate
Cardano’s ADA token decreased by 6.01% to $0.6412 amid market volatility and a governance debate over a proposed $100 million treasury allocation for the DeFi ecosystem.
The TapTools team proposed deploying 140 million ADA (approximately $100 million) to enhance liquidity for stablecoins like USDM. However, not all community members support this initiative:
- Account @cardano_whale cautioned that introducing 140 million ADA could create sell pressure in the current market, potentially harming prices.
- He suggested minting crypto-backed stablecoins like ObyUSD to mitigate direct selling pressure.
- Charles Hoskinson, Cardano's founder, countered these concerns, stating that sell pressure is a “false narrative.” He recommended gradual conversion of ADA through over-the-counter or algorithmic strategies to prevent market disruption.
- Hoskinson highlighted that Cardano's limited stablecoin options hinder growth and that this proposal could generate sustainable revenue for the treasury.
The community remains divided on the proposal’s timing and impact on ADA, especially given its inability to maintain levels above $0.68.
Technical Analysis Highlights
- ADA fell from $0.688 to $0.625 before recovering slightly to $0.641.
- Volume spiked between 01:00–02:00 UTC, establishing support at $0.622.
- A 58% recovery off the lows indicates some accumulation with higher lows forming a rising channel.
- Resistance at $0.645 has limited upward momentum; buyers are active near $0.636.
- Volume peaks at 13:50 and 14:00 UTC were 2.6M and 5.7M ADA, indicating renewed interest but limited follow-through.