Cardano Price Signals Potential Trend Reversal Amid Market Changes
Cardano Price Poised for Potential Reversal
Cardano (ADA) has seen minimal price movement, rising only 2.2% over the past week. However, market dynamics suggest this stability might shift soon. Increased activity from ADA whales and evolving market conditions indicate a possible change in trend.
The upcoming days will be crucial in determining whether this momentum builds into a reversal or dissipates.
Whale Activity and Dormancy Trends
Recent data shows that Cardano whales, those holding between 10 million and 100 million ADA, have been incrementally increasing their holdings from 13.16 billion to 13.21 billion ADA, adding approximately 50 million ADA, valued at $32.5 million. This accumulation is steady but not yet aggressive, requiring further acceleration to confirm market conviction.
The Spent Coins Age Band, measuring ADA movement across wallet ages, has decreased from 179.16 million ADA on October 11 to 114.71 million ADA by October 25, a 36% drop. This suggests rising dormancy, though not yet at levels indicative of a significant rally. The current figure is still above the local low of 89.22 million ADA from September 22, which preceded a brief bounce. Dormancy needs to fall below 90 million ADA to signal a true accumulation phase.
Technical Analysis: Reversal Patterns
On the daily chart, ADA is forming an inverse head-and-shoulders pattern with a sloping neckline, a typical precursor to bullish reversals. The coin trades near $0.65, just below the 0.236 Fibonacci retracement level at $0.66. A decisive daily close above this level could trigger a breakout, potentially driving prices toward $0.79, with further targets at $0.83 and $0.89.
The Relative Strength Index (RSI) shows a bullish divergence, strengthening ADA's technical case for a reversal. Between October 11 and 22, the RSI formed a higher low while ADA's price created a lower low, indicating diminishing selling pressure and rising buying strength. This divergence often signals a transition from downtrend to uptrend.
While the bullish RSI and head-and-shoulders pattern support a reversal, the downward-sloping neckline remains a potential hurdle. Failure to maintain prices above $0.60 could invalidate the structure, risking a decline to the $0.50 support level.