TL;DR:
- Short Open Interest against Cardano (ADA) reached its highest level since June 2023 this March 25th, reflecting a sharp bearish sentiment.
- Midnight Foundation and Monument Bank announced a partnership to tokenize £250 million in retail deposits under UK regulation.
- The deal seeks to integrate traditional bank deposits into the Midnight blockchain, maintaining full backing in British Pounds and legal protection.
It has been confirmed that short positions have returned to levels not seen in nearly three years, putting Cardano under renewed pressure. Bets against the price of ADA increased amidst weak price action and on-chain growth that is struggling to take off compared to its competitors.
Data from Santiment reveals that a large portion of active ADA wallets are currently in the red. Despite this, the market capitalization remains significant, creating a technical divergence that traders are capitalizing on through derivatives, anticipating a further correction while the RSI remains in neutral-low zones.
Midnight and Institutional Deposit Tokenization
In contrast to market sentiment, the Midnight Foundation confirmed a landmark partnership with Monument Bank. The goal is to make Monument the first UK-regulated bank to tokenize retail deposits on a public network. This move would initially inject £250 million in Total Value Locked (TVL) into the ecosystem linked to Cardano.
Charles Hoskinson, CEO of Cardano, highlighted that this negotiation is one of the largest in the project’s history. Midnight’s privacy-centric infrastructure will allow transaction data to remain protected and only visible to authorized entities, thereby complying with strict European banking regulations.
As Midnight moves toward its launch with institutional node operators, the community is watching to see if this flow of “real-world” capital can reverse ADA’s negative trend. Although Midnight has its own token design, the success of its privacy and regulated compliance services could attract the liquidity needed to revitalize the entire ecosystem.
In summary, the current bearish sentiment among traders contrasts with a fundamental breakthrough in banking adoption. The market will determine in the coming days if the deal with Monument Bank is enough to halt the sell-off and attract new institutional buyers.
