Cardano price faces an imminent 39% Cardano price drop according to technical patterns, despite the recent 8.6% rally driven by its Midnight subchain. Market analysts warn that the bearish structure persists and whales are using the bounce to massively exit their strategic positions.
On one hand, the asset is trading inside a daily bear flag, a formation that often precedes continuations of negative trends after brief pauses of consolidation. Between November 10 and December 9, a hidden bearish divergence was detected, where price made lower highs while RSI climbed, signaling a clear weakness in the current buying pressure.
Likewise, on-chain data shows that whales holding more than 1 billion ADA reduced their holdings from 1.86 billion to near zero in a matter of days. Furthermore, the spent coins indicator jumped from 95 million to 130 million, representing a 37% increase in selling activity by long-term holders.
Will the Midnight Phase Become a Bullish Reset or a Bearish Trap?
This technical scenario unfolds amidst expectations for Midnight, a privacy sidechain designed to serve Cardano and Bitcoin securely. Andrew Throuvalas highlights that Midnight offers multichain integration and selective disclosure, solving confidentiality and compliance issues on the public blockchain for enterprises.
However, the market interprets this phase not as a new beginning, but as an exit opportunity for previously trapped investors. Although the technology promises fundamental improvements, the divergence between price and momentum suggests that the dominant downtrend of recent months is not yet over.
If the flag support at $0.42 breaks, a technical projection of a 39% decline toward new annual lows would be validated. This could drag the value toward $0.37 and, in the worst case, down to the critical level of $0.25. To avoid this Cardano price drop, buyers must urgently reclaim $0.55 to invalidate the chart’s current negative technical setup. A close above $0.60 would confirm that the Midnight phase is shifting toward a constructive recovery, pushing away the immediate risk of total capitulation.
Cardano’s current situation is precarious, with an alignment of technical and on-chain signals pointing toward a deeper correction in the short term. As whales continue distributing their assets into every bounce, the market’s ability to absorb selling pressure will be severely tested. The coming days will be decisive in determining if support can hold or if the asset succumbs to the prevailing bearish structure in the market.
