Cardano Derivatives Market Shows $7.5M Risk as Price Drops Below $0.40

Cardano Incident Report and Market Impact

Cardano teams from IOG, EMURGO, and Intersect released a report detailing a partition bug caused by a delegation transaction that split the blockchain into two histories.
The issue was first identified on November 21, linked to a legacy vulnerability allowing an oversized hash to bypass validation.
Stake Pool Operators and exchanges are updating to node versions 10.5.2 and 10.5.3 to address the exploit.
No user funds were compromised, and wallet updates required no user action for reconciliation.
Exchanges are preparing to resume normal operations amid ongoing recovery efforts.

Market Reaction and Derivatives Risk

Cardano's price fell below $0.40, marking a 3% decline over 48 hours as traders assessed the incident impact.
A Coinglass analysis revealed $91 million in short leverage compared to $11.5 million in long positions over the last 30 days.
$7.5 million of long positions are concentrated near $0.38, posing a risk for liquidations and potential price drops to $0.31.
If upgrades proceed without issues, ADA may regain momentum towards $0.40.
The Cardano team has disaster recovery plans based on CIP 135 ready if anomalies occur during the transition.