The Cardano (ADA) network witnessed a severe market downturn on Thursday, with its token price plunging to a fresh 52-week low. Trading at $0.36, ADA has now shed more than 55% of its value since the start of the year. A striking feature of the sell-off was the overwhelming liquidation of bullish contracts, indicating a forceful bearish takeover.
Macroeconomic Headwinds Weigh on Sentiment
Broader market anxieties are contributing to the pressure on cryptocurrencies. Two significant external factors are at play. First, institutional activity shows signs of shifting. On December 17, BlackRock moved $382 million worth of Bitcoin and $220 million in Ethereum to Coinbase Prime. This transfer coincided with net outflows from the related spot ETFs, suggesting a temporary retreat by some major investors.
Second, anticipation of a potential interest rate hike by the Bank of Japan is creating market nervousness. Historically, such policy shifts have triggered the unwinding of carry trades, leading to corrections between 10% and 30% for Bitcoin and more volatile altcoins, including Cardano. The prevailing mood is captured by the Crypto Fear & Greed Index, which currently reads 16, signaling a state of “Extreme Fear.”
A Cascade of Liquidations
Market data reveals a stark picture of capitulation among optimistic traders. Over the past 24 hours, total liquidations for ADA positions reached $1.24 million. A staggering $1.18 million of that sum came from forced closures of long positions. This creates a liquidation imbalance of 1,303% against buyers, highlighting how many investors betting on a price rebound were caught wrong-footed.
Should investors sell immediately? Or is it worth buying Cardano?
The breach of several key support levels triggered a cascade of mandatory selling, accelerating the downward momentum. From a technical perspective, the outlook has deteriorated considerably. ADA is now trading well below its 50-day moving average of $0.48 and its 200-day moving average of $0.71. The Relative Strength Index (RSI) sits at 36.69, which, while not yet in oversold territory, indicates room for further declines. Analysts have identified $0.32 as the next critical support level to watch.
Development Continues Amid Price Weakness
Despite the challenging price action, development activity within the Cardano ecosystem persists. The Cardano Foundation has launched a multi-million ADA staking initiative aimed at enhancing stablecoin liquidity. Furthermore, the community has approved a treasury allocation of 70 million ADA to fund critical integrations.
Looking further ahead, the network has scheduled its Protocol Upgrade Version 11 for 2026, which is designed to improve scalability and governance. Short-term algorithmic forecasts point to a potential recovery toward the $0.50 level by mid-January 2026. However, the immediate focus remains on whether the $0.32 support will hold or if the market will experience another wave of investor surrender.
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