Why Cardano (ADA) Is Falling

Cardano ADA/USD was not immune to a widespread cryptocurrency market downturn Tuesday, falling as much as 6% to 63 cents in early trading. The popular altcoin fell alongside major digital assets as Bitcoin and Ethereum faced significant losses.

What To Know: Cardano, known for its proof-of-stake consensus mechanism and smart contract capabilities, often follows the performance of Bitcoin and Ethereum, making it susceptible to macro-driven volatility. The ongoing sell-off has meanwhile resulted in $1.48 billion in total liquidations.

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The combination of a risk-off environment, liquidity crunch and increased uncertainty contributed to ADA's downward trajectory Tuesday. Market analysts also point specific industry events amplifying the downturn. The Bybit hack on Ethereum and the LIBRA scam have eroded investor confidence, leading to capital outflows from altcoins, including Cardano.

Additionally, weak U.S. economic data, including the lowest Services PMI reading in nearly two years, has heightened fears of slowing growth, further pressuring risk assets.

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According to data from Benzinga Pro, ADA has a 52-week high of $1.32 and a 52-week low of $0.27.