What caused the ADA flash crash?

Cardano (ADA) has experienced a significant drop in price following recent developments, including its delisting from the popular trading platform Robinhood. The decision by Robinhood to remove ADA, along with Polygon (MATIC) and Solana (SOL), has raised concerns within the crypto community. Charles Hoskinson, the founder of Cardano, expressed his lack of surprise at entities leaving the market due to contradictory guidance and the absence of clarity from regulators.

Hoskinson called for the legislative branch to enact consumer-oriented legislation that would restore integrity and clarity to the United States crypto market. He emphasized the importance of aligning with the standards of pro-crypto nations that are leaving the U.S. behind. Despite the ongoing crackdown on crypto businesses, Hoskinson affirmed that protocols would continue to operate as intended, serving millions of users worldwide and building a fair and equitable global financial operating system.

The Securities and Exchange Commission (SEC) further intensified the concerns surrounding ADA when it labeled it as a security in its lawsuits against Binance and Coinbase, two major crypto exchanges. This sparked panic among the ADA community, leading to speculation that the SEC might also target Input Output Global (IOG), the team behind Cardano, for offering ADA as a security.

Amidst this regulatory pressure, Robinhood's decision to delist ADA, MATIC, and SOL on June 27 added to the uncertainty. The motive behind Robinhood's action remains unclear, but it is speculated that the SEC's lawsuits against Binance and Coinbase influenced the decision. Robinhood stated that the SEC's claim created an atmosphere of uncertainty around these assets, leading to the termination of support.

The SEC's crackdown on crypto businesses has been met with criticism from industry leaders, including Dan Gallagher, Chief Legal Officer at Robinhood, and Paul Grewal, Chief Legal Officer at Coinbase. Both executives expressed frustration with the SEC's dismissive approach and its failure to provide clear guidelines or engage in meaningful discussions.

The negative sentiment surrounding ADA has also affected its price, with a significant decline in recent days. Cardano has encountered a loss of approximately 26% in value over the past week, breaking crucial support levels that now act as resistance. The overall bearish trend and low demand levels have contributed to the current state of the ADA market.

Technical analysis suggests that ADA needs to overcome the resistance level at $0.30 to initiate a potential recovery. However, oversold conditions and sell signals indicate the possibility of further downward movement. The SEC's actions and the prevailing market conditions have created unfavourable circumstances for ADA, potentially weakening any rebound in the near future.

Despite these challenges, there is hope for a rebound in the coming months. Historical data indicates that oversold conditions, like those seen in March 2020, can lead to price recoveries. However, the current environment, including the Federal Reserve's plans to hike interest rates and the SEC's regulatory actions, may limit the strength of any potential rebound.

Flagship Thought

Cardano's price drop and the delisting of ADA on Robinhood have been significant events in the crypto market. The lack of clarity and contradictory guidance from regulators, along with the SEC's labelling of ADA as a security, have raised concerns and affected ADA's price. While technical analysis suggests the possibility of a rebound, the current market conditions and regulatory pressures present challenges for Cardano and its future performance.