Crypto Market Slips Below $3 Trillion as Fear Deepens; Cardano Faces Heavy Long Liquidations
The broader cryptocurrency market remained under pressure on Wednesday, with most digital assets trading in the red as total market capitalization fell below $3 trillion for the third time this month. According to market data, total crypto capitalization dropped to approximately $2.95 trillion, a level that some analysts warn could invite further downside if support fails to hold.
Market Sentiment Deteriorates
Price weakness has been accompanied by a sharp decline in sentiment. The Crypto Fear and Greed Index has fallen to 11, marking its lowest reading in roughly a month and firmly placing the market back in the “fear” zone.
This combination of declining prices and worsening sentiment suggests investors are reducing risk exposure as the year approaches its close. Major cryptocurrencies are now testing intermediate technical support levels, with traders reassessing positioning amid heightened uncertainty.
Cardano Underperforms as Longs Are Flushed Out
Cardano (ADA) has been among the weaker performers. At the time of writing, ADA was trading near $0.38, down 1.9% over the past 24 hours and roughly 18% on the week.
Derivatives data points to a significant liquidation imbalance. According to CoinGlass, Cardano saw approximately $1.24 million in liquidations over the past day, with more than 93% coming from leveraged long positions.
Long liquidations: $1.18 million
Short liquidations: $86,380
Long-to-short liquidation imbalance: 1,303%
This skew highlights how bullish positioning was aggressively unwound as price continued to drift lower.
Key Support Level in Focus
Technically, the next major support level for Cardano sits near $0.32. This level carries historical significance, as ADA rallied more than 216% from that zone in November 2024. A successful defense could stabilize price action, while a breakdown may expose ADA to deeper losses.
Looking Ahead: 2026 Brings Structural Upgrades
Despite near-term market pressure, Cardano’s longer-term roadmap continues to evolve. Early December marked the submission of Cardano’s next protocol upgrade for community review, proposing an Intra-Era Hard Fork to Protocol Version 11.
The upgrade is designed to enhance:
Plutus smart contract performance
Ledger consistency
Node-level security
Importantly, these improvements are planned without changing transaction structure or introducing a new ledger era, maintaining continuity while improving efficiency.
In a coordinated move toward 2026, the Cardano Critical Integrations Budget was also approved by community vote. The proposal allocates 70 million ADA from the Treasury to fund ecosystem-critical infrastructure, including:
Tier-1 stablecoins
Institutional custody and wallet solutions
Cross-chain bridges
Pricing oracles
Advanced on-chain analytics
The vote passed swiftly, marking one of the fastest governance approvals in Cardano’s history.
Bottom Line
The crypto market remains fragile as capitalization slips below key psychological thresholds and sentiment deteriorates. Cardano’s recent losses have been exacerbated by aggressive long liquidations, placing added pressure on price.
While short-term risk remains elevated, Cardano’s ongoing protocol development and ecosystem funding efforts suggest the project is positioning for longer-term growth — provided broader market conditions stabilize.
