Cardano ADA shorts spike to highest since June 2023 as 71% crash meets Midnight launch this week risk

Cardano's native token, ADA, is experiencing extreme negative sentiment, evidenced by short interest hitting its highest ratio since June 2023, following a 71% price decline since September. This bearish outlook coincides with the imminent launch of Midnight, a privacy-focused sidechain developed over eight years, which aims to attract institutional flows by offering regulatory-compliant privacy using zero-knowledge proofs.

Midnight utilizes a dual-token model with NIGHT for governance and DUST for fees, meaning direct demand does not cleanly route back to ADA, leading traders to favor betting on NIGHT instead. Despite this, Cardano founder Charles Hoskinson believes Midnight will significantly boost Cardano's ecosystem metrics, potentially multiplying Monthly Active Users (MAUs), Transactions, and Total Value Locked (TVL).

This launch is part of a broader push to revitalize Cardano, which currently shows low on-chain economic activity relative to its market cap. Recent infrastructure upgrades, including LayerZero integration and native USDCx deployment, alongside Midnight, provide Cardano with its clearest growth opportunity in years to align with current compliance pressures.

(Source：CryptoSlate)