Cardano Shorts Hit 3-Year High as ADA Drops 71% Before Midnight Launch
Cardano short positions reached their highest level since June 2023 as ADA trades at $0.2724, down 71% from September 2025 peaks, while the Midnight mainnet launches this week.
- 01ADA shorts are at their highest level since June 2023, signaling extreme bearish sentiment in derivatives markets
- 02The Midnight mainnet is in a "federated" and "guarded" launch phase as of March 25, 2026, with partners including Google Cloud and MoneyGram
- 03Despite a 71% price decline since September 2025, network economic activity remains low with 24-hour fees at $1,639
Cardano (ADA) is trading at $0.2724 as of March 25, 2026, representing a 71% decline from its September 2025 highs. Short positions on the asset have surged to levels not seen since June 2023, according to Santiment data published March 24, 2026.
What Happened
Derivatives data shows Cardano short interest has climbed to a 3-year peak as of March 24, 2026, coinciding with the Midnight mainnet's "federated" and "guarded" rollout beginning the week of March 23, 2026 SOURCE. The average wallet active on Cardano over the past 365 days is currently realizing a -43% return on investment, per Santiment metrics reported March 24, 2026.
Network activity remains subdued despite the launch event. Cardano's 24-hour fee generation totaled just $1,639 as of March 25, 2026, highlighting the gap between market valuation and on-chain economic usage.
Background
The Midnight sidechain represents Cardano's privacy-focused expansion, with major partners including Google Cloud and MoneyGram participating in the launch phase SOURCE. Founder Charles Hoskinson described the rollout as deliberately cautious, emphasizing security over speed.
ADA's 71% price decline from September 2025 peaks has eroded holder confidence, with total value locked (TVL) remaining low relative to the network's market capitalization.
The Bull Case
Santiment analysts identify the combination of deeply negative MVRV (-43% as of March 24, 2026) and overcrowded short positioning as a historically reliable contrarian signal that often precedes market bottoms SOURCE. Market observers note that record-high short interest creates potential for a "short squeeze" if the Midnight launch succeeds, forcing traders to cover positions rapidly.
- ADA shorts are at their highest level since June 2023, signaling extreme bearish sentiment in derivatives markets
The Bear Case
Hassan Maishera from Invezz cites waning investor participation and declining open interest as evidence of a bearish outlook, noting ADA's repeated failure to hold key support levels SOURCE. Market analysts point to the stark disconnect between Cardano's market valuation and actual on-chain activity, with daily fees of $1,639 as of March 25, 2026 representing fundamental drag on price recovery.
- The Midnight mainnet is in a "federated" and "guarded" launch phase as of March 25, 2026, with partners including Google Cloud and MoneyGram
What to Watch
Traders should monitor derivatives open interest changes through March 31, 2026, as Midnight adoption metrics emerge. Key resistance levels sit at $0.35 and $0.42, while support holds at $0.24. Network fee generation above $5,000 daily would signal renewed economic activity.
- Despite a 71% price decline since September 2025, network economic activity remains low with 24-hour fees at $1,639