The drama of the massive ADA liquidation: What awaits Cardano in 2026?

The cryptocurrency market is experiencing a period of considerable volatility. Overall sentiment has cooled significantly, with the fear and greed index registering only 11 points—its lowest in approximately a month—remaining firmly in panic territory. The total crypto market capitalization has fallen below $3 trillion, reaching $2.95 trillion, a level that could trigger even greater pressure in the coming days.

Promising Outlook for Cardano in 2026

Despite the current climate of uncertainty, the Cardano ecosystem is preparing for significant changes. The network has scheduled large-scale developments for 2026 that could reposition its value proposition. In early December, a major protocol update was submitted for community review: a hard fork (Hard Fork) to Version 11 of the Protocol that does not involve transitioning to a new ledger era.

The objectives of this improvement are clear: optimize Plutus performance, strengthen ledger consistency, and raise node-level security standards. This technical enhancement aims to boost efficiency without altering the fundamental transaction structure.

Approval of Critical Integrations Budget

Meanwhile, the Cardano community ratified the Cardano Critical Integrations Budget, an initiative allocating $70 million from the Treasury to a coordinated program of critical integrations. This vote closed swiftly, ranking among the fastest since the start of the community governance system.

The budget will be directed toward incorporating strategic Layer 1 infrastructure components, including:

• Layer 1-backed stablecoins
• Institutional digital asset custody solutions
• Wallets and bridges connecting different blockchains
• Price data oracles
• Advanced on-chain analysis tools

Imbalance in ADA Liquidations Raises Concerns

As Cardano builds its future, the present presents immediate challenges. In the last 24 hours, liquidations of $1.24 million occurred in ADA derivatives positions. The alarming part is the pronounced imbalance between what was liquidated: over 93% involved leveraged long positions.

Exact figures show $1.18 million in forced closures of bullish positions, while shorts totaled just $86,380. This imbalance results in a ratio of 1,303% between long versus short liquidations, highlighting systematic pressure on leveraged buyers.

Technical Levels and Price Outlook

Currently, Cardano is trading at $0.40, reflecting a 2.20% increase over the 24-hour period and relative stability over the past seven days (+0.08%). Despite these slight gains, the previous weekly context showed deeper retracements.

The next technical level that bulls must defend is at $0.32, a zone that marked a significant milestone in November 2024 when ADA experienced a rebound of over 216%. Defending this support will be crucial for the short-term direction of the coin.