• The SEC’s recent crypto crackdown has caused Cardano and Polygon prices to plummet, with both tokens failing to recover as much as their competitors.
• Despite having a thriving ecosystem, MATIC and ADA still face challenges as they struggle to regain their footing.
• Open interest for Polygon is bullish, while Cardano’s open interest is bearish, suggesting that investors are selling ADA instead of buying.
SEC Crypto Crackdown
The Securities and Exchange Commission (SEC) recently issued a high-profile lawsuit against leading crypto exchanges in the US, classifying Solana (SOL), Polygon (MATIC), and Cardano (ADA) tokens as unregistered securities. This decision sent shockwaves throughout the industry, leading to tokens plunging by up to 50%. Major US exchanges were forced to delist these tokens due to the sell pressure on the market.
Whereas some tokens have recovered from their losses, Cardano and Polygon continue to suffer from the SEC’s accusations. At press time, Solana had fully recovered its pre-SEC levels exchanging hands at $21.55, marking a 65% increase over the past month. Meanwhile, both MATIC and ADA remain far behind their June highs; trading at $0.74 down 22%, and $0.29 down 25%, respectively.
Despite being ranked seventh by market capitalization, Cardano remains one of the worst-performing major tokens over the past month with bearish sentiment prevailing among investors compared to Polygon’s bullish sentiment. According to Coinglass data , open interest for Polygon stands at $150 million with a long-to-short ratio of 1.04 indicating that more investors are buying MATIC rather than selling it; whereas open interest for Cardano stands at $110 million with a long-to-short ratio of 0.9 showing that investors are selling ADA instead of buying it .
Crucial Weeks Ahead
The coming weeks will be crucial in determining whether or not Cardano and Polygon will be able recover from these losses or if they will continue on this downward spiral; leaving them lagging behind other major crypto assets such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) or even Dogecoin (DOGE).
Cardano and Polygon have yet to fully recover from the SEC’s crypto crackdown which has caused them both pain in terms of price drops and investor sentiment alike; however there is still hope for them if they can manage some successful momentum in the next few weeks as they try to regain some lost ground against other major crypto assets in 2020/2023