Cardano Faces Market Challenges, but Potential Growth Signals Emerge Ahead of Midnight Launch

Cardano (ADA) is experiencing a tough stretch in the market as its price remains close to yearly lows. Nevertheless, optimism is building as we approach the long-awaited launch of Midnight in December. With ongoing concerns regarding declining network activity and reduced DeFi liquidity, new technical indicators and exciting upcoming developments hint that Cardano might be gearing up for a recovery in the near future.

Key Takeaways

Cardano's price is struggling at approximately $0.41, reflecting a 70% drop from its peak in December 2024.
Total value locked (TVL) has decreased significantly, impacting liquidity and market sentiment.
Charles Hoskinson remains optimistic about upcoming developments, particularly the Midnight launch in December.
Technical signals indicate ADA could be stabilizing, with potential upside if critical resistance levels are surpassed.
The future of Cardano's ecosystem hinges on the success of Midnight and its ability to attract users and activity back to the platform.

Cardano ADA ADAUSD

Current Challenges for Cardano (ADA)

As of now, Cardano (ADA) is trading around $0.41, which is a significant 70% drop from its peak of about $1.2 in December 2024, making it one of the weaker performers in the current market downturn. The total value locked (TVL) in Cardano has decreased by 36% over the last 30 days, bringing it down to $186 million, with stablecoin liquidity falling below $40 million. In comparison, competitors like Monad have approached $100 million in TVL shortly after their launch.

The “ghost chain” narrative has resurfaced following some network glitches, leading to jokes about Cardano’s minimal user activity. Even Nansen’s CEO has suggested that ADA could drop out of the top 20, especially as competitors gain traction in tangible assets, gaming, and high-volume decentralized finance.

Despite these challenges, Cardano's founder Charles Hoskinson remains positive, stating that the current negative sentiment does not align with the upcoming developments. He highlighted that Midnight, a privacy-focused sidechain launching in December, has strong developer partnerships that could help revitalize the ecosystem.

Indicators of a Possible Recovery

In spite of the negative pressure weighing on ADA, technical analysis indicates signs of stabilization. The token is forming a falling-wedge pattern, which is historically known as a bullish reversal signal. The Relative Strength Index (RSI) is currently at 30, indicating oversold conditions, while derivatives funding has become positive, suggesting that traders are gearing up for potential upward movement.

Important resistance levels are identified at $0.49 and $0.5097, with a breakout above these levels potentially pushing prices toward the range of $0.50 to $0.61. However, analysts warn that failing to maintain the support range of $0.39 to $0.40 could subject ADA to more significant losses, potentially dropping to $0.277, the low recorded in August 2023.

With DeFi activity declining and market trust remaining tenuous, the upcoming launch of Midnight in December could serve as a critical juncture for Cardano's outlook in 2025. Success could lead to a notable increase in TVL and development activity—key metrics that traders are paying close attention to as indicators of real adoption.

At present, ADA appears to be consolidating. Nevertheless, the combination of oversold technical indicators, whale interest, and potential ecosystem upgrades could lay the groundwork for a positive year-end shift, contingent upon Cardano successfully transforming anticipation into tangible on-chain growth.

Cover image from ChatGPT, ADAUSD chart from TradingView