Cardano Price News: ADA Volumes Double as NIGHT Airdrop Enters Redemption Phase

Cardano (ADA) has gone up by 4% in the past 24 hours to $0.46 after the redemption period of the Midnight airdrop started.

Investors who claimed or scavenged their NIGHT tokens during previous phases will now start receiving tokens in four different “thaws”.

Redemption Process for NIGHT – Source: Midnight TGE Official Website

A total of 4.5 billion tokens were claimed and will be distributed within the next 360 days. Eligible claimers will be able to either redeem their tokens as they are unlocked or altogether after the redemption period ends.

In addition, there will be a 90-day grace period for late redeemers during which the website for the Midnight airdrop will remain operational.

What is Midnight and Why Is It Relevant to Cardano’s Outlook?

Midnight is a privacy-focused layer-2 within the Cardano ecosystem that will support zero-knowledge transactions.

Privacy tokens have gained popularity this year. Zcash (ZEC) has been the top-performing token in this segment, generating gains exceeding 600% since the year started while reaching as much as $700 at some point in the past month.

Some of the most interesting characteristics of the Midnight L2 include:

• ID verification data is stored separately. Users will be able to prove that they have verified their identity without having to expose their personal data to third parties.
• Users can choose what kind of information they want to reveal.
• The network’s transaction costs are not impacted by the price swings of its native asset.

Midnight could bring additional transaction volumes to the Cardano blockchain, or at least that’s what the market seems to think.

However, it could still be a while for the L2’s mainnet to go live. According to the project’s roadmap, the first phase (called Hilo) involves attracting liquidity to the NIGHT token by launching it as a Cardano-native asset.

Then, during the Kūkolu phase, a Genesis block will be minted to deploy the first dApps in the Midnight ecosystem on a stable mainnet environment.

Despite the Midnight hype, the Cardano ecosystem remains one of the most notable laggards among the top 10 cryptos in terms of growth and development. Its total value locked (TVL) currently sits at $200 million.

Comparatively, the BNB Chain’s DeFi ecosystem is worth 35 times that, while Solana’s is 45x larger as well. This reflects how poorly the project has capitalized on top trends like lending, liquid staking, yield-farming, meme coins, and stablecoins.

ADA Closes In On Key Resistance at $0.50

Looking at the ADA chart, it is still too early to tell if the Midnight hype will help the token reverse its downtrend.

ADA/USD Daily Chart (Binance) – Source: TradingView

Cardano has been one of the worst-performing tokens in the top 10 this year with a 45% loss. This reduces the odds that it delivers higher gains in the mid-term compared to BNB Coin (BNB) and Ethereum (ETH) if altseason resumes.

The key level to watch right now is $0.50. This is a highly relevant technical price zone as the 200-day exponential moving average is in confluence with ADA’s structural pivot. This means that the token’s previous low sits at this level.

Hence, for ADA to reverse its downtrend, it would have to overcome such a relevant resistance. If that happens, the odds of a massive breakout will be high as bears are likely positioned for a continuation of the downtrend following this week’s FOMC meeting.

A bullish breakout could set Cardano on track to hit $0.70, meaning a 40% upside potential in the near term.