Investors in Cardano (ADA) are facing a period of significant market stress. Despite the project’s development team achieving a key milestone with the launch of the Midnight network, price action tells a contradictory story. A combination of bearish technical signals and a notably cooler market sentiment has exerted substantial downward pressure, erasing crucial support levels.

On-Chain Metrics Reflect Growing Caution

A look at blockchain data reinforces the pessimistic outlook, with three specific factors weighing on sentiment:

• Declining Social Buzz: Data from Santiment reveals that Cardano’s social dominance has plummeted to its lowest point in a year. The reduced discussion around the asset typically signals waning investor interest.
• Movement of Dormant Coins: The “Age Consumed” metric has recently shown pronounced spikes. This indicates that wallets inactive for long periods are moving their holdings—a pattern historically associated with selling pressure from long-term holders.
• Rising Bearish Bets: In derivatives markets, funding rates have turned negative. This shows that traders are currently placing more bets on further price declines than on a recovery.

Chart Structure Breaks Down

The recent acceleration of the downtrend is attributed to the breakdown of an established trading channel. Market observers note that this structural failure has significantly darkened the technical picture. Over the weekly period, ADA’s price slid by nearly 20%, establishing a new 52-week low at $0.37.

Analysts, including Ali Martinez, are now focusing on lower price targets. Should the selling pressure persist, the zone around $0.29 is viewed as the next significant support area. Indicators like the “SuperTrend” on higher timeframes also suggest this is an extended corrective phase rather than a short-term pullback.

Should investors sell immediately? Or is it worth buying Cardano?

Ecosystem Development Provides a Counter-Narrative

Amid the gloomy price performance, project development continues to advance. The introduction of the NIGHT token for the Midnight network represents a major achievement. Over 4.5 billion tokens are slated for distribution, and major exchanges like Kraken and OKX have already announced listings for the asset.

This activity is visibly impacting the Cardano ecosystem. Trading volume on Cardano-based decentralized exchanges (DEXs) has, in some cases, tripled following the NIGHT launch. This demonstrates active network usage, even if it is not currently reflected in the price of the native ADA token.

Outlook and Key Levels

Cardano approaches the year-end at a critical technical juncture. If buyers fail to swiftly reclaim the area around $0.38, the risk of a further sell-off toward the $0.29 chart target increases substantially. Only a clear recovery above the 50-day moving average, situated near $0.48, would begin to repair the damaged technical structure—a move that would likely also require a supportive tailwind from a stronger Bitcoin.

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