Cardano saw a sudden drop in recent hours, extending a decline on the hourly chart. Cardano posted a massive red hourly candlestick at one point in the drop, which caused significant long liquidations on an hourly basis.

The drop comes as a surprise, given that Cardano had rallied in the earlier hours of today, alongside the rest of the crypto market, before giving up its gains.

ADA/USD Hourly Chart, Courtesy: TradingViewAccording to CoinGlass data, in the last hour, $167,850 were liquidated in long liquidations as the sudden price drop caught bulls who had hoped for a Santa rally to begin across the crypto market unawares, as the equities market rose heading into the Christmas holidays.

The long liquidations in the last hour well surpassed short liquidations, which came in at just $243, causing an imbalance. This, if calculated, puts the liquidation imbalance between shorts and longs at 66,530%.

Volumes were light in the Christmas holiday, with Cardano volume dropping 22% to $380 million. The pattern fits what tends to happen around major holidays, where trading volumes drop sharply and positioning becomes more defensive.

At press time, ADA was down 2.09% in the last 24 hours to $0.35 and down 3.67% weekly, mirroring mixed trading on the crypto market on Christmas Day.

A larger chunk of cryptocurrencies are trading in the red, suggesting that investors are reassessing risk appetite.

Santa rally still possible?

Despite the current lull on the crypto markets, investors still remain hopeful for a “Santa Claus Rally,” which typically encompasses the last five trading days of the year and the first two of the new one.

U.S. stocks rose in a classic Santa rally as a relatively quiet session on Wall Street before Christmas saw stocks hitting all-time highs, with crypto traders now anticipating a similar trend on the markets, although signs of decoupling remain.

Crypto traders continue to watch out for signals as to where the market might head next. A more than $23 billion options expiry is being watched, although thin liquidity in the holidays has affected market activity

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