The outlook for Cardano (ADA) as 2025 draws to a close is one of growing concern. The cryptocurrency is grappling with persistent selling pressure, a situation compounded by significant investor withdrawals and heightened volatility from its new privacy-focused token. This confluence of factors is fostering a cautious environment for market participants.
Whale Exodus and Declining Futures Activity
On-chain metrics reveal a clear trend of distribution. Over the past two months, large wallets holding between 1 million and 100 million ADA have collectively sold approximately 120 million tokens. This sustained selling from major holders has effectively capped any meaningful recovery attempts above the $0.40 threshold.
Parallel to this, interest in the derivatives market has waned. The total Open Interest for Cardano futures contracts has declined to roughly $660 million, a figure notably below the over $1 billion levels seen earlier in the year. This reduction in speculative positioning currently limits the potential for a sharp, short-squeeze-driven reversal in the near term.
Technical Indicators Flash Warning Signs
From a chart perspective, ADA is currently trading around $0.37, reflecting a weekly loss of about 9%. A particularly bearish technical development has emerged on the monthly chart: the MACD indicator has produced a death cross signal. Historically, this pattern within Cardano’s market has preceded corrections ranging from 30% to over 80%.
Immediate resistance is now positioned at the 20-day moving average near $0.39. A break above this level is needed to suggest any short-term recovery. On the downside, the crucial support to watch is at $0.34. A failure to hold this zone could accelerate selling, with analysts identifying $0.23 as the next probable target.
Should investors sell immediately? Or is it worth buying Cardano?
Midnight Token Launch Creates Ecosystem Turbulence
Recent attention within the Cardano ecosystem has shifted to the launch of the privacy token Midnight (NIGHT) on December 8th. Following an initial surge to $1.81, the token experienced a dramatic collapse, plummeting approximately 94% from its peak. It is now attempting to find stability around the $0.10 mark—a level seen as critical for maintaining confidence in Cardano’s broader privacy-chain strategy.
Despite the severe price drop, trading activity for NIGHT remains exceptionally high. At times, its 24-hour trading volume has surpassed that of more established alternative cryptocurrencies. The token’s ability to defend its current price floor is viewed as a key barometer for the initiative’s near-term prospects.
Binance Listing Offers a Glimmer of Potential Support
A potential positive development comes from the world’s largest exchange. Binance has announced it will introduce new trading pairs starting December 24th, including ADA/USD1. This pair will utilize a fiat-backed stablecoin pegged 1:1 to the US dollar. The move is expected to provide additional liquidity and new trading avenues, though its impact may be muted within the current weak overall market sentiment.
The $0.34 Line in the Sand
Cardano finds itself at a critical juncture. The interplay of ominous technical signals, consistent selling by large holders, and uncertainty surrounding the Midnight project continues to dampen market sentiment. The defense of the $0.34 support level is now paramount. A decisive break below it would likely pave the way for a move toward $0.23. Only a sustained push above $0.39 would begin to improve the beleaguered short-term technical picture.
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