The price fluctuation of Cardano (ada price usd) is attributed to a number of factors such as technological upgrading, market speculation and the macroeconomic environment. From 2023 to 2024, Cardano network completed the Hydra expansion and upgrade, doubling the speed of transaction processing (TPS) from 257 to 780, reducing the cost of deploying smart contracts from $0.45 to $0.18 (reduction by 60%). This upgrade has led to the number of on-chain Dapps increasing from 3,400 to 7,100 during the third quarter of 2024, with the total value locked (TVL) exceeding 2.5 billion US dollars. But the growth rate of the ecosystem is different from market expectations – say, The liquidity pool size of the decentralized exchange Minswap increased to $680 million in June 2024 and dropped back to $420 million (down by 38%), causing the ada price usd to fall by 22% for the month.
Market leverage and derivatives trading increase short-term volatilities. In August 2024, the open size of ADA futures reached an all-time high of 2.8 billion US dollars. Of them, 75% were long positions, and the median leverage ratio was 15 times. During that week, the unexpected US CPI data led to a sell-off in the crypto market. The ada price usd dropped from $0.95 to $0.72 within 24 hours (a 24% decline). The margin calls on the derivatives market rose to $340 million, of which 68% represented the long position. Further, the implied volatility (IV) of ADA options rose to 120% during the event, much larger than those of Bitcoin (85%) and Ethereum (95%), indicating a wide divergence of the market in the direction of the price. CoinGlass statistics show that the daily average price change of ADA in 2024 was 8.7%, which is above the industry average of 6.3%, and its 30-day correlation coefficient with the Nasdaq index rose from 0.22 to 0.58, indicating that the impact of macro risks on it has increased.
Structural fluctuations have been triggered by regulatory policies and ecological accidents. In May 2024, the EU’s Crypto Markets Act (MiCA) took effect, categorizing Cardano as a compliant public chain and boosting the weekly trading volume of its euro trading pair (ADA/EUR) to 1.2 billion euros (55% more than the previous week). But subsequently, after the German Federal Financial Supervisory Authority (BaFin) required the exchange increase the ADA margin ratio to 30%, the ada price usd fell by 12% over a period of three days. In October of the same year, Cardano’s agricultural data link project with the Ethiopian government suffered a server failure, which held up 500,000 transactions on the chain (with a daily processing volume of only 40% of the amount projected), which led to market skepticism regarding the stability of the ecosystem. The price of ADA decreased by 18% in one week, and its market capitalization vanished by 3.4 billion US dollars.
Macroeconomics and industry cycles exaggerate price fluctuations. After the Federal Reserve’s 50 basis points interest rate hike in 2024, the correlation between ada price usd and US Treasury yields strengthened negatively (correlation coefficient -0.45), and institutional investors pulled 420 million US dollars out of Cardano funds and invested into low-risk products. Meanwhile, after the Bitcoin halving cycle (April 2024), the correlation coefficient of ADA with BTC rose from 0.76 to 0.91. But due to the decline in market liquidity (global crypto trading volume fell by 23%), its recovery was weaker than expected – ADA rose by 45% within 30 days after halving. Lower than Solana’s 68% and Ethereum’s 52%. Black swan events in the industry hit prices too. For example, in September 2024, a centralized exchange was hacked (470 million US dollars loss). Although it had nothing to do with Cardano, market panic still caused a one-day 9.3% drop in ada price usd.
On-chain metrics and position structure both point to the reason behind volatility at its center. Addresses with more than one year of ADA had a proportion of 71% as of Q3 2024, with an average floating profit level at 92%. However, the exchange’s reserves continued to account for 11% of the floating amount (approximately 4.1 billion ADA) and showed an over-the-counter short-term selling pressure risk. When, for instance, the pledge ratio dropped from 78% to 70% in July 2024, the exchange’s net inflow within one day was 120 million ADA (approximately 110 million US dollars) and resulted in a three-day price decline of 15%. Moreover, DeFi protocol clearing mechanisms exaggerated volatility – as the ada price usd dropped below $0.75, the clearing trigger line for the mortgage lending platform Aada Finance centered on this price level (63% of the total), which triggered a series of on-chain clearing volumes above $80 million, driving the price further down.
Overall, the volatility in the price of ada price usd is caused by technological iteration, leveraged trading, regulatory risk and synchronization with the macro cycle. While its 30-day annualized volatility has fallen from 90% in 2023 to 70% in 2024, it remains higher than that of legacy asset classes. Bloomberg crypto analysts pointed out that if the Cardano community’s TVL exceeds 5 billion US dollars in 2025 (currently 2.5 billion US dollars), its price volatility can decrease to 50%-60%, but in the short term, caution should still be exercised against the effects of excessive market leverage and black swan incidents.