Encryption market: extreme fear and uncertain perspectives

[Ben Graham]

ADA: investors in the coin should prepare for a period of high volatility. Long-term potential remains bullish, but it is separated from the current reality of "extreme fear" by a deep chasm of uncertainty.

The crypto market is going through one of its toughest periods in recent years. The Fear & Greed Index plunged to 5 points in 2026 — the lowest level in several years — and is now stuck in the "extreme fear" zone (8 out of 100 today, compared with 9 yesterday and 11 last week). Crypto market capitalization has fallen 22% since the start of 2026 (now $2.3 trillion according to TradingView), Bitcoin is down more than 10% year?to?date, and Ethereum plunged by about 33%.

Altcoins have been especially vulnerable in this storm. Cardano (ADA) — once a flagship of the second wave of cryptocurrencies — is undergoing a deep correction, exacerbated by a paradoxical effect from what seemed like positive news.

Current situation: "buy the rumor, sell the news" and weak interest

At the time of publication, ADA was trading around 0.2570, having bounced slightly from the week's low near 0.2500. Since the last peak in August 2025 (~1.0170), the asset has lost roughly 75%, showing a steady medium?term bearish trend since October.

CME paradox The week's key event was the launch of ADA futures on the Chicago Mercantile Exchange (CME) on February 11, 2026. Historically, the introduction of institutional derivatives on an asset has been a growth trigger. But in current conditions, the classic "buy the rumor, sell the news" scenario played out: ADA did not rally but continued down — the derivatives launch provoked a burst of speculative activity without durable spot demand.

Fundamental backdrop: macro and capital rotation ADA's decline is not an isolated story but part of a broader exodus from risky assets.

Macro shock The World Uncertainty Index exceeded 95,000 points in Q4 2025, higher than during the pandemic, Brexit or the eurozone debt crisis. Geopolitical tension and Fed policy uncertainty are forcing institutions to cut positions in high?risk classes.

Capital rotation There is a clear rotation from crypto into AI stocks and traditional safe havens. Ongoing outflows from US spot Bitcoin ETFs add structural pressure to the ecosystem.

Lack of retail demand Retail investors, normally the engine of altcoin rallies, are inactive. Fear has paralysed decision-making.

Technical picture

On the daily chart, the price remains below the medium-term 50-day EMA (0.3460) and below short-term 200-EMA levels on the 1?hour (0.2712) and 4?hour (0.3197) charts, signaling persistent downward momentum.

RSI on the daily, weekly and monthly charts has got stuck inside the sell zone, approaching 30 on the daily and the oversold zone.

Short-term outlook (1–3 months)

Positive scenario (technical bounce). Holding support at 0.2500–0.2600 and improving derivative sentiment (funding rates have turned positive and the long/short ratio is 1.09) could spur a rebound to 0.3100–0.3500. But sustainable growth requires renewed ETF inflows and lower macro uncertainty.

Negative scenario (protracted decline). A break of 0.2500–0.2200 (monthly lows) would likely open the way to a test of 0.2000. With further deterioration in external conditions, a move to historical lows is possible.

Medium?term outlook for 2026: views diverge sharply.

Bullish long?term targets range widely — 1.0000–2.5000 by end-2026 — based on three assumptions:

1. continued ecosystem innovation and Cardano development;
2. possible institutional adoption via ETFs and strategic holdings;
3. technological upgrades (Leios and others).

However, given the current market climate, such targets should be treated with caution. For ADA to reach 1.0000 it would need a fourfold increase from present levels. In a crypto winter with liquidity outflows and strong competition from Ethereum and Solana, that looks extremely optimistic.

A more realistic band may be 0.4600 (daily 144-EMA) – 0.5500 (weekly 144-EMA), with an upside case to ~0.7820 (monthly 144?EMA) if macro conditions stabilize in H2.

Long?term outlook for 2027–2028: very optimistic scenario (5.0000–10.0000) is theoretically possible, but only if multiple conditions are met simultaneously:

1. ETF approval for ADA;
2. inclusion of Cardano in some countries' reserve assets;
3. a major technological breakthrough that secures competitive advantage.

A pessimistic scenario sees stagnation or decline due to regulatory setbacks, failure to attract developers, or absorption by stronger ecosystems (Ethereum, Solana).

Conclusion

Cardano (ADA) is at a critical juncture. The asset is balancing between a technical rebound and a deep collapse. The CME futures launch, contrary to expectations, exposed structural weakness: institutional interest has not yet translated into spot demand.

Key factors to reverse the situation:

1. Stabilization of the macro backdrop and Fed signals pointing to easing.
2. Cessation of outflows from spot ETFs and a return of risk appetite.
3. Cardano's ability to deliver real mass?market use cases that change the "dead project" narrative.

Investors in ADA should prepare for high volatility. Long?term potential remains, but it is separated from the current reality of "extreme fear" by a wide gulf of uncertainty.

A dollar?cost?averaging approach makes sense only for investors with a 3–5 year horizon and high risk tolerance. Short-term traders should trade around clear technical levels (0.2200–0.2700) with stop losses for longs below 0.2200. Profit targets of 0.3000–0.3200 are possible, but remember that in a mini-winter, any positive move may be only a temporary correction within a durable downtrend.

The material has been provided by InstaForex Company - www.instaforex.com