Cardano price continues to wallow in heightened volatility owing to the decision by the Federal Open Market Committee (FOMC) to hike interest rates by another 0.75%. As discussed on Wednesday, ADA stretched its leg further down and tested support at $0.3810. The smart contracts token now trades at $0.3910 as traders scan for short-term buy orders to $0.4100.
Meet the New Cardano Improvement Proposal
The CEO of the Cardano Foundation, Fredrick Gregaard, announced the release of a new Cardano Improvement Proposal (CIP) on Wednesday – referring to it as a key milestone in the network’s open-source journey.
According to the CEO, a CIP is a conduit that allows the Cardano Community to bring forward new features and collect input from the ecosystem on issues pertaining to the network. Gregaard added that full transparency is necessary when making informed decisions. Hence, the new CIP requires all participating projects to be enlisted.
With the CIP-9999 – the community can highlight problems that have yet to be solved and could form the basis for grant allocation built on top of proposals. The new CIP gives power to the Cardano Community – because they can make the changes they want to see implemented.
Cardano Price Prediction: ADA Matches into Short-term Recovery
Cardano price sustained an uptrend throughout the third and fourth week of October, bolstered by increased demand from support it had confirmed at $0.3350. An ascending trend line functioned as the uptrend’s springboard, ensuring that buyers were mainly in control despite frequent retracements as investors locked in profits at various price points.
Nevertheless, what goes up must come down. Cardano’s positive move faltered as the price brushed shoulders with $0.4420, although the bullish candle’s wick tagged $0.4400. Subsequently, a bearish candle breached the rising trend line, breaking ADA’s winning streak.
ADA/USD four-hour chart
As overhead pressure roared into the market, Cardano dropped below all the applied moving averages – including the 200-day EMA (Exponential Moving Average (EMA) (in purple), the 50-day EMA (in red) and the 100-day EMA (in blue).
The MACD (Moving Average Convergence Divergence) indicator, which had on Sunday confirmed a sell signal, slipped below the mean line – adding credence to the bearish outlook in Cardano price.
Meanwhile, the same MACD indicator could flash a buy signal in the coming sessions, which will compel traders to place short-term long positions to $0.4100. Nonetheless, before activating their buy orders, traders must wait for ADA to make a clean move above the 50-day EMA.
The bullish outlook for Cardano’s price is also supported by fundamentals like the spike in the number of daily active addresses on the network. According to on-chain data from Santiment, these addresses almost hit a new monthly high but topped 84,478 on November 2.
Spikes in this metric imply high speculation levels among ADA holders. In other words, more people are betting on Cardano’s ability to keep the uptrend intact. Therefore, a consistent increase in the number of addresses transacting on the protocol daily is necessary to move not only to $0.4100 but to $1.0000.
Cardano Active Addresses | Santiment
The resistance highlighted by the 50 EMA could sabotage the anticipated move to $0.4100 if bullish pressure fades. This means that short positions below the same moving average could immediately turn profitable.
However, traders might wait for a break below the 100-day EMA before going all-in with their short positions to be safe. ADA’s recent support at $0.3810 is a potential take-profit position, but stubbornly bearish traders can hold on until the token tags $0.3650.
Santiment’s MVRV (Market Value Realized Value) on-chain model reveals that most ADA holders are in profit. The metric’s position at 3.88 is above 1, which means investors could consider Cardano overvalued. In such a case, they are likely to sell, thus mounting pressure on ADA to revisit lower price levels.
The MVRV tracks ADA holders’ profit or loss ratio by comparing the price at which the tokens they hold last moved with their current market value. On the other hand, ADA becomes undervalued when the MVRV ratio slides below 1.
MVRV ratio | Santiment
As Cardano Price Makes Baby Steps To $0.41, Consider IMPT Presale
Cardano is a crypto project to reckon with in the industry, but investors can also consider other relatively new projects like IMPT, with a potential return of 50x gains.
IMPT is an innovative crypto project offering various opportunities for users to acquire carbon credits from the IMPT.io marketplace. The platform is bridging the gap to a greener environment by allowing individuals and corporations to help fight the climate crisis.
The team is said to have partnered with over 10,000 biggest retailers to help users offset their carbon footprint while shopping. From the IMPT marketplace, users can sell, retire or hold their carbon credits as an investment.
In just four weeks after its launch, the IMPT token presale has brought in more than $12 million, catching the attention of many crypto experts. The team looks forward to raising $25 million in its current presale stage while selling IMPT for $0.023.
Given its fundamentals, it is likely that IMPT will rise dramatically from its presale price once listing on exchanges starts.
The market is currently in a news-driven environment where the prices of cryptocurrencies have been determined by news agenda rather than fundamentals.
Bitfinex analysts have warned crypto investors to be cautious as bitcoin’s (BTC) recovery over the weekend is not a sign that its correction is over; the asset could witness more bloodshed in the near term.
In the latest Bitfinex Alpha report, experts deemed the market’s reaction this week critical, especially as supply alleviated over the weekend could return when traditional markets open.
“No Man’s Land”
Since Saturday, bitcoin has risen almost 10% from $57,600 to $63,000, closing last week in the green. The asset has surged above the 125-day range low of $60,200, which it broke through earlier this month after news of the German government’s massive BTC selling hit the market.
Market sentiment began to improve after reports that wallets linked to the German government were almost empty. However, the positive sentiment may not be sustained for long as the BTC the German authorities moved to trading desks and exchanges are yet to be sold.
While the supply from Germany appears to have been factored into bitcoin’s market price, Bitfinex analysts believe the end of selling pressure depends on how the involved trading desks execute their trades in the coming days.
Although the shift in sentiment underscores the market’s capacity to integrate new information and adjust expectations quickly, analysts think the market’s reaction over the first two trading days of the week cannot be overlooked for two reasons.
First, the low support level in the $60,200 range has now become a potential resistance line. Second, trading patterns over the past three months suggest that weekends are usually favorable for markets, especially on Saturdays when supply pressure seems to subside.
“We are now in no man’s land until we get clear resolution above or below this level,” the analysts said.
A News-Driven Environment
Besides the potential resistance level and three-month weekend trading pattern, the market is currently in a news-driven environment, where the prices of cryptocurrencies have been determined by news agendas rather than fundamentals.
Since selling pressure concerns are not yet completely obsolete due to upcoming Mt Gox creditor distributions, Bitfinex analysts expect such headlines to continue to have some impact on price movements. As such, the analysts urged investors to exercise caution in their trading strategies.
BlackRock’s IBIT led with $117.25 million in inflows on July 15, also being the most traded Bitcoin ETF.
The US spot Bitcoin ETFs recorded a daily net inflow of $301 million on July 15th. This extended their winning streak to seven consecutive days amidst a broader market recovery.
None of the ETFs recorded outflows for the day.
Bitcoin ETFs Rake in $16.11B in Net Inflows Since Jan
According to the data compiled by SoSoValue, BlackRock’s IBIT, the top spot Bitcoin ETF by net asset value, recorded the largest net inflows of the day at $117.25 million. IBIT was also the most actively traded Bitcoin ETF on Monday, with a volume of $1.24 billion. Ark Invest and 21Shares’ ARKB came in close behind with net inflows of $117.19 million.
Fidelity’s FBTC experienced net inflows of $36.15 million on Monday, while Bitwise’s BITB saw $15.24 million in inflows. VanEck’s HODL, Invesco and Galaxy Digital’s BTCO, and Franklin Templeton’s EZBC funds also recorded net inflows. Meanwhile, Grayscale’s GBTC and other ETFs, such as Valkyrie’s BRRR, WisdomTree’s BTCW, and Hashdex’s DEFI, registered no flows for the day.
A total of $2.26 billion was traded on Monday. The trading volume for these ETFs was less than in March when it exceeded $8 billion on some days. Meanwhile, these funds have collectively attracted $16.11 billion in net inflow since their January launch.
What’s Next For Bitcoin?
Earlier this month, bitcoin’s price decline was mainly due to fears of massive selling pressure from Mt. Gox and the German government’s BTC sales.
But the assassination attempt on pro-crypto former US President and presumptive Republican candidate Donald Trump at Saturday’s rally seemed to spark a recovery in the world’s largest digital asset, and experts are bullish on the asset’s price trajectory going forward. Bitcoin surged more than 9% over the past week and was currently trading slightly below $64,000.
Veteran trader Peter Brandt discussed bitcoin’s price outlook, suggesting a potential major rally. He referred to a pattern he terms “Hump->Slump->Bump->Dump->Pump” and highlighted that the July 5 double top attempt was a bear trap, confirmed by the July 13 close. He sees a likely continued upward trend but warned that a close below $56,000 would negate this bullish view.
“Bitcoin $BTC could be unfolding its often-repeated Hump…Slump…Bump…Dump…Pump chart construction. Jul 5 attempt at the double top was a bear trap, confirmed by Jul 13 close. Most likely scenario now is that bears are trapped. Close below $56k negates this interpretation”
PeckShield alert reveals LI.FI’s protocol vulnerability is similar to a March 2022 attack, with the same bug recurring.
The decentralized finance (DeFi) platform LI.FI protocol has suffered an exploit amounting to over $8 million.
Cyvers Alerts reported detecting suspicious transactions within the LI.FI cross-chain transaction aggregator.
LI.FI Issues Warning After $8 Million Exploit
LI.FI confirmed the breach in a statement on July 16 via X: “Please do not interact with any http://LI.FI powered applications for now! We’re investigating a potential exploit.” The team clarified that users who did not set infinite approval are not at risk, emphasizing that only those who manually set infinite approvals seem to be affected.
According to Cyvers Alerts, more than $8 million in user funds have been stolen, with the majority being stablecoins. According to on-chain data, the hacker’s wallet holds 1,715 Ether (ETH) valued at $5.8 million and USDC, USDT, and DAI stablecoins.
Cyvers Alerts advised users to revoke relevant authorizations immediately, noting that the attacker is actively converting USDC and USDT into ETH.
Crypto security firm Decurity provided insights into the exploit, stating that it involves the LI.FI bridge. “The root cause is a possibility of an arbitrary call with user-controlled data via depositToGasZipERC20() in GasZipFacet, which was deployed 5 days ago,” Decurity explained on X.
“In general, the risks behind routers, cross-chain swaps, etc. are about token approvals. Raw native assets like (unwrapped) ETH are safe from these kinds of hacks b/c they don’t have approvals as an option. Most users & wallets also no longer do “infinite approvals” which gives a smart contract total control on removing any amount of their tokens. It’s important to understand which tokens you’re approving to which contracts.
This dashboard looks for all transactions of a user that intersects Lifi. Not all of these transactions indicate risk- but you can see how, broadly, integrations & layers of tech (like how Metamask bridge uses Lifi on BSC) can complicate how users do or don’t put their assets at risk. Revoke Cash is the most well known approval manager app.
But it’s also good security practice to simply rotate your address. New addresses start with 0 approvals, so starting fresh by moving your tokens to a fresh address is another good security practice.” – commented Carlos Mercado, Data Scientist at Flipside Crypto.
Recent Exploit Mirrors March 2022 Attack
Further analysis by PeckShield alert revealed that the vulnerability is similar to a previous attack on LI.FI’s protocol that occurred on March 20, 2022. That incident saw a bad actor exploit LI.FI’s smart contract, specifically the swapping feature, before bridging.
The attacker manipulated the system to call token contracts directly within their contract’s context, making users who had given infinite approval vulnerable. This exploit resulted in the theft of approximately 205 ETH from 29 wallets, affecting tokens such as USDC, MATIC, RPL, GNO, USDT, MVI, AUDIO, AAVE, JRT, and DAI.
“The bug is basically the same. Are we learning anything from the past lesson(s)?” PeckShield Alert said in a July 16 X post.
Following the 2022 incident, LI.FI disabled all swap methods in its smart contract and worked on developing a fix to prevent future vulnerabilities. However, the recurrence of a similar exploit raises concerns about the platform’s security measures and whether adequate steps were taken to address the vulnerabilities identified in the previous breach.
LI.FI is a liquidity aggregation protocol that allows users to trade across various blockchains, venues, and bridges.
