Key notes
- Stakeholders in the Cardano ecosystem released a joint post-mortem statement on Saturday, detailing the events surrounding a shard exploit on the network.
- Cardano (ADA) price fell below $0.40 on Saturday, November 22, marking a further 3% decline over the past 48 hours.
- Cardano liquidation chart data shows short leverage of 91 million on ADA, compared to active long leverage of $11 million.
Cardano ecosystem teams from Input Output Global (IOG), EMURGO, and Intersect released a detailed incident report on Saturday. It described the events behind a controversial partition bug. The report explained that a bug delegation transaction split the chain into two competing histories. The issue was first discovered on November 21 as a malfunction allowed an oversized hash to bypass initial validation, revealing a legacy vulnerability dating back to 2022.
To revert the exploit, Cardano Stake Pool operators and exchanges are upgrading to node versions 10.5.2 and 10.5.3, as detailed. The teams confirmed that no user funds were compromised and said that updates to the affected wallets did not require any user intervention to resolve the inconsistencies. Efforts to restore normalcy are underway, with stock exchanges preparing to resume normal operations.
Despite ongoing technical upgrades and assurances of the safety of user funds, trader sentiment weakened as reactions to recent network disruptions persisted in Cardano derivatives markets.
Derivatives Markets Reveal $7.5 Million Long Risk as ADA Falls Below $0.40
Cardano fell below $0.40 on Saturday, extending a 3% 48-hour decline as traders reassessed the network incident. Coinglass’ 30-Day Liquidation Map, a tool that tracks leveraged positions pooled across major exchanges, revealed more capitulation risks ahead.
Cardano (ADA) Derivatives Market Analysis | Source: Coinglass
Traders have deployed $91 million in cumulative short leverage over the past 30 days, compared to just $11.5 million in active long leverage. Even more worrying, $7.5 million of these long positions are concentrated near $0.38, forming the largest local liquidation cluster. Limited liquidity support below this level increases the risk of a flash crash to $0.31.
If the upgrades go smoothly and the convergence finalizes without anomalies, ADA price could regain momentum towards the $0.40 handle. The Cardano team has paused disaster recovery plans based on CIP 135, in case of anomalies during the transition to the patched chain.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article is intended to provide accurate and current information, but should not be considered financial or investment advice. Because market conditions can change quickly, we encourage you to verify the information for yourself and consult a professional before making any decisions based on this content.
Ibrahim Ajibade is a seasoned research analyst with experience supporting various Web3 startups and financial organizations. He completed his undergraduate degree in Economics and is currently studying a Masters in Blockchain and Distributed Ledger technologies at the University of Malta.
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