Cardano finds itself at a pivotal moment this Thursday, caught between deteriorating technical indicators and a single, significant hope for December. As network activity declines and charts flash warning signals, the cryptocurrency’s community pins its recovery prospects on the imminent launch of the long-anticipated Midnight protocol. The central question remains: can this new development reverse the current downtrend, or is Cardano poised for a deeper decline?
Network Metrics Paint a Concerning Picture
Beyond the price chart, fundamental on-chain data reveals alarming trends that underscore the asset’s current challenges. A recent “chain split” incident, although resolved, temporarily rattled investor confidence. More persistently worrying are these key metrics:
- Plummeting User Engagement: The count of active addresses has collapsed by over 70% year-over-year.
- Capital Exodus: The Total Value Locked (TVL) in Cardano’s decentralized finance sector has nearly fallen to a third of its late 2024 peak, now hovering in the $219 million to $250 million range.
- Liquidity Deficit: The ecosystem continues to trail its competitors in Stablecoin liquidity, creating friction for traders.
A Glimmer of Hope: The Midnight Protocol Launch
Amid this bleak technical backdrop, all attention is turning to December 8, 2025. The scheduled debut of the “Midnight” protocol and its associated NIGHT token airdrop is widely viewed as the potential catalyst for a decisive trend reversal. Designed as a data-protection-focused sidechain, Midnight primarily targets enterprises requiring confidential smart contracts without sacrificing regulatory compliance. Founder Charles Hoskinson has described it as the final crucial piece of the ecosystem puzzle. However, market observers are questioning whether this innovation alone can counteract the prevailing market weakness.
Should investors sell immediately? Or is it worth buying Cardano?
The Battle on the Charts: $0.40 as the Final Frontier
The current price action vividly reflects investor anxiety. While the psychologically significant $0.40 level was tenuously defended following a recent sell-off, the technical outlook remains grim. Market analysts point to the formation of a “death cross” on the daily chart—a pattern where short-term moving averages cross below long-term ones. This is classically interpreted as a harbinger of further losses, a development that has noticeably dampened market sentiment.
Cardano is now trapped between disappointing usage statistics and ambitious technological promises. For traders, the $0.40 price point represents the final defensive line. A successful, smooth rollout of the Midnight protocol could shift focus toward challenging the resistance at $0.50. Conversely, a failed or problematic launch may grant the bears definitive control over the market’s direction.
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