Cardano Clings to $0.74 Support as Misappropriation Claims Stir Uncertainty — Will Audit Results Trigger a Crash?

Cardano (ADA) is holding steady at a critical $0.74 support level on May 20, 2025, despite swirling allegations of fund misappropriation leveled against its founder, Charles Hoskinson.

The token saw a modest 1.4% gain in the past 24 hours, trading at approximately $0.745, but remains 5.6% lower over the week. Real-time market data indicates a 24-hour trading volume of $820 million, a 17% drop from the prior day, signaling cautious investor activity amid the controversy.

With ADA sitting nearly 75% below its September 2021 peak of $3.09, the market is closely watching for catalysts that could sway its trajectory, particularly the forthcoming audit results promised by the Cardano Foundation.

Misappropriation Allegations Rock Cardano Community

On May 7, 2025, NFT artist Masato Alexander accused Hoskinson of misusing privileged access during the 2021 Allegra hard fork to move approximately 318 million ADA, valued at roughly $619 million at the time.

Alexander alleged a two-step process involving the erasure of unclaimed ADA from the 2017 initial coin offering and a Move Instantaneous Rewards transaction that funneled funds to Hoskinson or Input Output Global, Cardano’s parent company.

He criticized the lack of transparency, noting that only $7 million was formally transferred to Intersect, Cardano’s governance group, drawing parallels to the 2016 Ethereum DAO hack but highlighting Cardano’s weaker community oversight.

Hoskinson has vehemently denied these claims, calling them baseless and harmful. He clarified that 99.8% of the 2017 token sale’s ADA was redeemed, with the remaining 18 to 24 million ADA donated to Intersect via an automated process to prevent token loss. A comprehensive treasury audit, he promised, will soon clarify the transactions.

Did You Know?
Cardano’s Ouroboros protocol, the first provably secure proof-of-stake mechanism, processes transactions with energy efficiency 1,000 times greater than Bitcoin’s proof-of-work system.

Technical Indicators Signal Consolidation

Cardano’s price action reflects a market in wait-and-see mode. The Relative Strength Index (RSI) stands at 51.7, indicating neutral momentum, while the Moving Average Convergence Divergence (MACD) shows a bearish crossover with limited upward pressure.

The 10-day and 20-day Exponential Moving Averages (EMAs) and Simple Moving Averages (SMAs) are acting as resistance around $0.76, suggesting short-term selling pressure.

However, the upward-trending 30-, 50-, 100-, and 200-day moving averages provide longer-term support and a buffer. Real-time data shows ADA’s market cap holding at $26.5 billion, with whale activity up 10% in the past week, hinting at potential accumulation despite the uncertainty.

For bulls to regain momentum, ADA must break above the 10-day EMA at $0.76, potentially targeting $0.78. Failure to hold the 100-day EMA at $0.73 could see prices slide to $0.70 or even $0.68.

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Hoskinson’s Response and Community Impact

Hoskinson expressed deep personal hurt over the community’s reaction, announcing plans to step back from social media. His promise of a transparent audit has done little to quell speculation, with some investors bracing for volatility when results are released.

Real-time sentiment analysis indicates a 60% negative sentiment in recent crypto community discussions, reflecting eroded trust. However, Cardano’s robust fundamentals, including its proof-of-stake protocol and ongoing development of smart contract capabilities, continue to attract long-term investors. The audit’s outcome will likely be a pivotal moment for ADA’s price and Cardano’s reputation.