The Cardano (ADA) price is having a tough time keeping up after dropping below important technical markers, just days after the new privacy-focused sidechain Midnight was revealed.
The token closed below the lower Bollinger Band on the daily chart, a signal that usually implies increased downside risk. Selling volume has started to pick up again, with ADA falling 7.6% on the day and forming a bearish engulfing candle.
So, the short-term outlook is not doing the bulls any favors. ADA has been stuck below its 20-day moving average for almost a month, and that line — currently around $0.564 — has turned into solid resistance.
With the next support level at around $0.52, the market is now looking to see if that level can hold as pressure grows.
Is Midnight the "new Cardano?"
This dip is a bit of a bummer for Cardano right now, as it is trying to bring some fresh excitement through the Midnight sidechain. Midnight has a dual-token system built around NIGHT and DUST. One will be the governance and utility asset, and the other will be the gas token. The rollout includes a few phases that reward eligible users, and a mining-like system that increases access over time.
But even with appealing token mechanics and its cross-chain goals, the market seems more focused on what is coming next — and not in a good way.
It seems like the recent dip in ADA is already pricing in a potential wave of selling tied to the upcoming distribution. Traders might be getting ready for a typical "sell the news" situation, where token holders sell their ADA to claim new assets or protect against expected dilution.
