The price of ADA drops sharply after the collapse of Midnight Network's NIGHT token

Source: CritpoTendencia Original Title: ADA Price Collapses This Thursday Following NIGHT Shake Original Link: The recent airdrop of the NIGHT token, belonging to Cardano’s privacy sidechain known as Midnight Network, was touted as one of the most anticipated events in the crypto ecosystem.

However, just hours after its official launch, the token experienced a massive sell-off that wiped out much of its market value. This movement ended up dragging ADA’s price down, which was exposed to strong selling pressure.

Cardano’s native currency, one of the leading cryptocurrencies by market capitalization, currently records the worst performance within the top 10 cryptos. According to CoinMarketCap data, ADA has fallen nearly 6% in the last 24 hours, while on the weekly chart, it shows a decline of 4.9%. At the time of writing, the price is around $0.42 per unit.

This is one of the most aggressive sell-offs ADA has experienced in recent months, raising doubts about short-term investor interest. In fact, the outflows suggest that some capital has chosen to stay on the sidelines of the asset.

This negative reaction occurs amid a context of widespread uncertainty in the cryptocurrency market. However, the case of ADA takes on a particular nuance due to the nature of the bearish catalyst that triggered this movement.

The element that caused ADA’s price to collapse

As anticipated, the main bearish catalyst for Cardano was directly linked to Midnight Network. This privacy-focused sidechain was shaping up as an attractive proposal in 2025, marked by renewed interest in assets in this segment, such as Monero, Zcash, and Dash.

In this context, on Tuesday, December 9, the NIGHT token made its commercial debut. During its first hours of trading, the launch seemed to meet the most optimistic expectations: its market capitalization quickly rose to $1.2 billion, and trading volume exceeded $320 million.

These initial data reflected strong market appetite for the Midnight Network proposal. However, airdrops are often accompanied by high volatility and massive liquidations by early recipients of the token.

This dynamic, combined with unfavorable headlines, led to a high-tension narrative that accelerated selling pressure. In the hours following its debut, NIGHT lost more than 90% of its market value.

Although the network presents an attractive concept and has public backing, this was not enough to sustain investor confidence. The critical point is that Midnight is an integral part of the Cardano ecosystem, so the collapse of NIGHT directly impacted the overall perception of the network. In this sense, ADA’s fall can be interpreted as an immediate consequence of NIGHT’s collapse.

What was the failure of Midnight Network and its token NIGHT?

Midnight Network is presented, at least in theory, as an infrastructure with enormous potential, thanks to its focus on privacy. This attribute is especially valued by the crypto community in a context of increasing surveillance and regulation.

From a technical standpoint, the project’s design relies on zero-knowledge proofs (ZKP) as a fundamental pillar. Economically, the model is based on a dual-token system.

NIGHT serves as a governance and value-capturing token, while DUST is used for private transactions within the network. This separation aims to optimize protocol functions and preserve user privacy. Generally speaking, the network proposes a scheme of selective information disclosure.

This approach is attractive to companies and organizations that need to protect sensitive data without completely sacrificing transparency.

However, the main criticism pointed out by many community members was the high supply of the token. According to official project data, NIGHT has a total supply of 24 million units, of which approximately 16.61 million are already in circulation. Despite the implementation of vesting mechanisms to mitigate abrupt sales during the unlocking process, these measures failed to prevent the collapse of the price.