Dormant Cardano (ADA) Whale Loses $6.2M in Costly USDA Swap

Dormant Whale's Return Ends in Significant Loss

A Cardano whale, inactive for five years, resurfaced only to incur a substantial loss of $6.2 million in a single swap. The holder attempted to trade 14.45 million ADA, valued at $7.08 million, within a low-liquidity pool. This transaction resulted in the receipt of only 847,694 USDA. The wallet, identified as "addr1qy5lcrk497pg88xkfgwxp2v9y328g3j87tvq3sefpkmg7n7nst5js3fzwl4cm8g46fm6unayaet8yfcw5kp3jkjy0tdsr4x534," reappeared on Sunday, prompting considerable discussion within the cryptocurrency community.

This incident involving the wallet "addr…4×534" underscores the inherent risks associated with trading in low-liquidity markets. It serves as a stark example of how such trades can lead to steep financial losses when market liquidity is thin.

The incident has drawn criticism towards the Cardano blockchain's DeFi ecosystem, which is reportedly facing liquidity challenges. One user on X commented, "And cardano market cap higher than hyperliquid lmao what a joke of an industry," highlighting a perceived disparity in market valuation versus ecosystem depth.

The whale's significant loss has also raised concerns about the trading behavior of major holders. Large trades, often referred to as "fat-finger" trades, can still significantly impact cryptocurrency markets, particularly when executed in pools with limited liquidity.

Whale Selling Trends Intensify

Crypto analyst Ali has provided further insights into recent whale activity on X. He reported, "440 million Cardano $ADA have been sold by whales in just one month!" Data sourced from Santiment indicates that large holders, possessing between 100 million and 1 billion ADA, began divesting their tokens from late September through mid-November.

The accompanying chart illustrated an even greater volume of sales by large holders in early October. This period of offloading ADA by major holders coincided with a decline in the token's price, suggesting a weakening of investor confidence in the market.

As of the time of reporting, Cardano was trading at $0.4919, reflecting a 2% decrease over the past 24 hours and a 21% drop over the last month, according to data from CoinMarketCap. This price depreciation indicates sustained market pressure and an increase in selling activity.

Recent 'Liquidity Errors' in the Wider Crypto Market

The broader cryptocurrency market has also experienced incidents related to liquidity and token creation. Last month, Paxos encountered a "technical error" that resulted in the accidental minting of 300 trillion PYUSD tokens. This error persisted for approximately 30 minutes before Paxos successfully burned the excess tokens. A Paxos spokesperson stated, "Paxos immediately identified the error and burned the excess PYUSD." In response, Aave temporarily paused PYUSD markets as a precautionary measure to mitigate potential issues.

Bitcoin Plunges to $93K as Liquidations Trigger Fear Index Crash