Cardano's ADA Token Crashes Amid Thin Network Activity and Fed Fears

Cardano's ADA token took a hit on September 5, dropping by 4.4% in a matter of hours. This sudden decline was not caused by a single event but rather a combination of factors.

The initial excitement around Cardano's partnership with WhatsApp for direct payments seems to have worn off quickly. While the news that ADA and USDCx can now be sent to any WhatsApp contact worldwide was initially met with enthusiasm, the on-chain numbers tell a different story.

According to DeFiLlama data, Cardano recorded a sharp fall in weekly network activity, with a 37.4% drop in active addresses from August 31 to September 5. This significant decrease in user activity tends to erode trust even when major partnerships look promising on paper.

The leveraged traders were also caught off guard by the price drop. As per CoinGlass data, there was a total of $1.28 million in liquidations, with long positions accounting for $1.19 million of that figure.

The broader crypto market is also feeling the heat from Washington, with markets bracing for the September 16 Fed rate decision. President Trump's threat to stop trading with countries running a trade deficit if the Fed doesn't cut rates has added to the uncertainty and increased selling pressure on risk assets like ADA.