Key Insights
Cardano trades 73% below its December peak and approaches key support near $0.3056, raising prospects of a technical rebound.
Oversold indicators like RSI and Stochastic Oscillator suggest selling pressure may be waning, opening room for upward movement.
DeFi volumes on Cardano doubled in December after the NIGHT token launch, indicating renewed on-chain activity and user engagement.
Cardano remains in a prolonged bear phase, dropping significantly from its December 2024 high of $1.3245. The token was recently trading at $0.3565, marking a decline of around 73% from that peak. This level represents the lowest since November 2023, extending a persistent downward trend in the broader crypto market.
Technical analysis shows Cardano has fallen below major moving averages and broken through a crucial support at $0.5140, a level seen in both February and April this year. This breach confirms sustained bearish pressure. Broader market factors and weak on-chain metrics, including a low total value locked in Cardano’s DeFi sector, have contributed to the token's underperformance.
Indicators Point to Oversold Status
Despite the prevailing decline, technical indicators suggest a potential shift. The Relative Strength Index (RSI) has dropped to 27, signaling that the token is oversold. Additionally, the Stochastic Oscillator lines have reached their lowest points in several months. These indicators hint at a possible reversal in the near term.
Source: TradingView
Cardano is nearing the $0.3056 level, which previously acted as a solid support from July through October 2023. If this level holds, analysts expect a possible upward move toward $0.5241. This figure corresponds to the token’s low in February, April, and June 2024. A successful rebound would represent a gain of nearly 40% from current levels.
Midnight Token Launch Boosts Network Activity
On-chain developments have added momentum to Cardano’s outlook. The recent launch of the NIGHT token, tied to Cardano’s upcoming sidechain Midnight, has led to a surge in activity. Data from DeFi Llama shows decentralized exchanges on Cardano processed over $193 million in volume this month, doubling November's figures and reaching the highest point since January.
Additional upgrades are planned for the network, including the Leios protocol update, which aims to improve transaction throughput through parallel processing. Furthermore, the anticipated launch of a Cardano ETF by Grayscale in 2026 may provide long-term support to market confidence.
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