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Cardano, for the first time in a year and a half, has dropped out of the top ten cryptocurrencies by market capitalization. Investor interest in ADA is waning, and the price movement appears weak. However, the fundamental indicators and ecosystem development suggest a more intricate scenario than what the price chart indicates.
Plutus Update and Hard Fork Preparation
Cardano has released an update for its native smart contract language, Plutus. The new version 1.58.0.0 will enhance its built-in functionality, improve network stability, and manage the mempool more effectively.
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This update is part of the preparations for the van Rossem hard fork, which will transition the network to protocol version 11. The upgrade will occur within the current era and will be targeted: it will not affect the transaction structure or the registration model.
To test the update, a node running version 10.6.2 has been launched on the SanchoNet network. This node is utilized to verify changes before implementation. An update to version 10.7.0 is expected within two weeks, which is planned for deployment during the hard fork on the main network.
The preparations for this update also lay the groundwork for the transition to protocol version 12, which will be implemented in the upcoming Dijkstra era.
Grayscale Increases ADA Holdings
Investment firm Grayscale has increased its stake in Cardano within its Smart Contract Fund. At the beginning of 2026, ADA accounted for approximately 18.55% of the portfolio, which then rose to 19.55%, and later reached 20.34%.
This increase in holdings occurred amidst a prolonged decline in ADA’s price since September 2025, indicating a strategic nature to the purchases.
Source: grayscale.com
Grayscale’s activity coincided with Cardano’s expanding involvement in the decentralized finance sector related to Bitcoin. The ecosystem aims to enhance BTC liquidity through non-custodial collateral models and stablecoin lending. This approach enables Bitcoin holders to utilize DeFi tools without relinquishing control over their assets.
Entrepreneur Zach Humphries believes this strategy could provide Cardano with a competitive edge in the smart contract market, where Ethereum and Solana currently dominate. Even partial implementation could attract significant liquidity.
In May 2025, at a conference in Las Vegas, Input Output Global showcased the exchange of BTC for Minswap tokens. In June, the Cardinal protocol was launched, allowing Bitcoin holders to access loans and staking within the Cardano ecosystem.
Launch of the Midnight Private Blockchain
In mid-February, Cardano founder Charles Hoskinson announced plans for the launch of a new privacy-focused blockchain, Midnight, at the end of March.
The project is being developed with partners, including Google and Telegram, according to Hoskinson.
Midnight will utilize zero-knowledge proofs, enabling users to selectively disclose information. The network will serve as a partner infrastructure for Cardano, ensuring privacy and regulatory compliance for decentralized applications.
On February 26, the Midnight City Simulation platform will be unveiled—a demonstration environment showcasing scalable privacy and selective data disclosure. The concept of “rational privacy” suggests that data is hidden by default but can be partially revealed when necessary.
The simulation will be based on an artificial intelligence agent that generates an unpredictable flow of transactions. This will allow testing of the network’s ability to handle load and scale under conditions similar to real-world scenarios.
ADA-Backed Loans
The American exchange Coinbase has expanded its list of crypto assets that can be used as collateral for loans through the DeFi protocol Morpho. In addition to Bitcoin and Ethereum, Cardano, Dogecoin, Litecoin, and XRP have been included in the list.
Users will be able to obtain up to 100,000 USDC. This service will be available to clients in the U.S., excluding New York state.
Technical Analysis
From a technical perspective, Cardano’s trend remains downward. The price is significantly below the 50-day moving average, and weekly trading volumes remain low.
Weakness is also evident in the derivatives market: open interest in futures has fallen below $450 million by the end of February 2026—the lowest level since November 2024.
The relative strength index (RSI) is in the oversold zone (below 30). Although this signal often precedes a reversal, the market may ignore it during a strong downward trend.
The key support level remains around $0.22, established in June 2023. Losing this level could intensify sell-offs. A trend reversal is likely if the price consolidates above the resistance level of $0.41–0.42.
Source: tradingview.com
Conclusion
The Cardano ecosystem continues to evolve actively: a hard fork is in preparation, the Midnight private blockchain is being launched, and DeFi solutions and integrations with Bitcoin are expanding. However, these fundamental changes have yet to be reflected in the price. Investors remain focused on macroeconomic uncertainty and the overall weakness of the crypto market.
In this context, institutional players are demonstrating a more long-term approach: Grayscale has increased its ADA holdings despite the price decline. If the network’s technological initiatives lead to increased liquidity and real-world usage, the gap between fundamental indicators and market valuation may narrow over time.
This material and the information contained herein do not constitute individual or any other investment advice. The views of the editorial team may not align with those of analytical portals and experts.
