Cardano price held steady, reaching its highest point since November 19 as the crypto market rebounded. ADA jumped to a high of $0.4647, up by 25% from its lowest point this year. It also rebounded as Cardano launched Midnight, its zero-knowledge privacy network.
Charles Hoskinson hails Cardano Midnight launch
Cardano price remained in an upbeat tone this week, mostly because of the ongoing crypto market rally. Bitcoin has jumped to over $92,000, while the market capitalization of all tokens has jumped to over $3.1 trillion.
The coin also jumped as Cardano unveiled Midnight, a privacy-focused sidechain that balances confidentiality with regulatory compliance. In a statement after the launch, Hoskinson called it the biggest event in Cardano’s history. He said:
“Midnight is the fastest-growing project we have ever built because it is much needed. People are starting to realize that privacy is not a guarantee and is not given. It is nice to have some tools to ensure privacy in the blockchain space.”
Congratulations Midnight x.com/i/broadcasts/1…
Midnight’s token started trading on Tuesday, with the NIGHT price dropping by over 50% despite being listed by some of the biggest exchanges in the crypto space, like OKX, Bybit, Kraken, and KuCoin.
Its market capitalization dropped to $857 million, while the fully diluted valuation (FDV) moved to $1.238 billion. According to CoinGecko, the 24-hour trading volume was over $185 million.
The next important step will happen on Wednesday when people who participated in the Glacier airdrop and the scavenger mine start claiming their tokens. This claim will happen in four stages, with the final one taking place in December next year.
The process may lead to more selling pressure on the NIGHT token price as the claimants start selling their tokens.
Still, there is a risk on whether Midnight will help to boost Cardano price and its ecosystem in the near term. For one, there exists other zero-knowledge-based networks in the crypto industry and their growth has been muted. Top examples are networks like Scroll and zkSync.
Ecosystem growth challenges
The Midnight launch comes at a time when Cardano’s ecosystem is growing. Data compiled by DeFi Llama shows that the network has not attracted many developers this year, with the network having just 61 dApps.
Cardano has a total value locked of over $202 million, down by over 24% in the last 30 days. The biggest players in the network are MinSwap, Liqwid, and Indigo. A $202 million TVL is a small number for a crypto project with over $16 billion.
Most notably, Cardano has a stablecoin supply of just $39 million, a tiny number in an industry with over $300 billion in assets. One reason for this performance is that Cardano lacks a major oracle network in its network.
Therefore, Charles Hoskinson hopes that the potential growth of Midnight will be bullish for Cardano as it is a Cardano asset.
At the same time, Cardano will use 70 million ADA tokens to boost its ecosystem in the coming months. The funds will go towards boosting stablecoin integrations, building institutional custody, developing tools to enable analytics in the network, and bringing in global pricing oracles.
Cardano price technical analysis
ADA price chart | Source: TradingView
ADA price has been in a strong downward trend in the past few weeks, moving from over $1 in August to a low of $0.3730.
Cardano is now attempting to bounce back and has formed an inverse head-and-shoulders pattern, one of the most common bullish reversal signs in technical analysis.
ADA token seems to be moving towards the important resistance level at $0.5143, the lower side of the inverted cup-and-handle pattern.
This could be a sign of a break-and-retest pattern, which is a common bearish continuation sign in technical analysis.
Therefore, the most likely scenario is where Cardano retests this resistance and then resumes the downtrend, potentially to this month’s low of $0.3729.
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