The price of Cardano rose 8.6% in the last 24 hours, amid growing expectations around Midnight, a new privacy-focused subchain. In lunar cycles, midnight often symbolizes a restart — a moment before a new beginning. However, for ADA, this restart may indicate the start of a new decline.

The value follows a bearish pattern, the momentum remains weak and several on-chain signals point to a possible continuation of the same downward trend that has prevailed for months. Is this the beginning of a 39% pullback in the price of ADA?

Bear flag structure and hidden bearish divergence still favor the downtrend.

Cardano is still trading within a bear flag on the daily chart. A bear flag forms when a sharp decline is followed by a rising channel of smaller amplitude, which often serves as a pause before resuming the downtrend.

Between November 10 and December 9, the price of ADA registered a lower high, while the RSI marked a higher high. The RSI, or Relative Strength Index, is a momentum indicator that shows whether there is more buying or selling pressure. When the RSI advances, but the price does not follow, it usually indicates that the rise is weak and sellers continue to dominate the movement.

As ADA has already fallen about 54% in the last twelve months, this hidden bearish divergence reinforces the indication that the negative trend has not yet finished.

The mast of the bear flag projects a possible drop of 39% if the lower trend line is broken. This movement would bring ADA close to $0.25, a more bearish target.

The scenario defines the rest of the analysis: Midnight could represent a new stage for the network, but the chart still interprets this brief rise as part of a broader decline.

Decided to have a real look at Midnight ($NIGHT). 🧵

Basically, Midnight is a sidechain designed to act as a privacy layer for Cardano, Bitcoin, and several major chains.

It stands out in three ways: multichain integration, selective disclosure, and the tokenomics of DUST and… pic.twitter.com/wrHp4niWt2

— Andrew Throuvalas 🟠💎 (@AThrouvalas) December 9, 2025

Whales exit while spent coins increase and investors sell on the rise?

On-chain signals are aligned with the bearish pattern on the chart.

The largest whales of Cardano, wallets with more than 1 billion ADA, have substantially reduced their exposure since December 8. The combined balance fell from approximately 1.86 billion ADA to almost zero in just a few days. Whales do not empty positions this way unless they expect better entry opportunities later or want to take advantage of the rising movement to exit the market.

Another on-chain indicator confirms this pattern. The Spent Coins Age Band monitors the daily circulation volume of ADA between new and old wallets. On December 6, about 95.26 million ADA circulated on-chain. On December 10, this number rose to 130.46 million ADA, an increase of approximately 37% in four days.

This advance suggests that more and more investors, including old ones, may be sending coins to the market. When whale balances drop and coin movements increase, operators typically take advantage of the rise to sell, not to accumulate.

The first part showed that the structure is bearish. This section points to equally negative behavior. Now, the price levels translate this pressure to specific zones that traders should monitor.

Cardano price levels indicate a broader downward path.

With negative on-chain charts and signals, the next movements depend on some key points.

If the price of ADA falls below $0.42, the lower line of the bear flag breaks. From there, the price may retreat to $0.37. If $0.37 does not hold, the full projection of the flag gains strength, towards $0.25 — corresponding to the 39% drop suggested by the pattern.

For the buying side, the scenario is restricted, but it still exists. Cardano would need to first regain the level of $0.55. A daily close above this range would break the upper line of the bear flag and weaken the negative bias. If it surpasses $0.60, the current Midnight phase could turn into a more consistent recovery.

Currently, a drop of only 7% to 8% would be sufficient to trigger the formation of a downtrend, while an increase of almost 20% would be needed to invalidate this scenario. With large investors exiting and the number of coins spent rising, the evidence continues to favor selling pressure.

The article 'Cardano Price Enters Its ‘Midnight Phase’: The Start of a New Decline?' was first seen on BeInCrypto Brazil.