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Cardano (ADA) has spent months ranging, but recent price action suggests a critical inflection point is near. Since December, the token has oscillated within a broader range. However, a miniature consolidation zone near the long-term range lows has emerged over the past three weeks, revealing a tug-of-war between buyers and sellers.
Short-Term Bearish Momentum vs. Bullish Market Structure
Despite ADA’s range-bound action, the 1-day chart shows a bullish market structure—established after reclaiming $0.68 as support and surging to a higher low at $0.74. However, at the time of writing, the token trades below this level and under the 20-period moving average, signaling short-term bearish momentum. The Bollinger Bands remain wide, indicating potential volatility ahead.
Bulls Face Mounting Pressure Near $0.73 Support
On the 4-hour chart, ADA’s range tightened between $0.73 and $0.84, with the mid-range level pegged at $0.78. The Bollinger Bands have contracted around current price action, suggesting waning volatility as ADA slowly drifts toward the $0.73 support level. Declining trading volumes and a gently falling OBV (On-Balance Volume) reflect diminishing buying strength, while the momentum indicators favor sellers.
Still, a potential bounce from the $0.71–$0.725 region could offer a low-risk buying opportunity, although the setup remains risky given the market’s fragility.
Also Read: Cardano (ADA) Struggles as Bitcoin Surges
On-Chain Data Signals Strength Amid Correction
According to Santiment, short to medium-term holders are still in profit, with a 90-day MVRV of 26.5%, raising the risk of profit-taking. In contrast, long-term holders are less incentivized to sell, with the 365-day MVRV at only 8%. Encouragingly, the Mean Coin Age (MCA) has trended higher since April, suggesting accumulation rather than distribution.
Notably, the recent price dip has not triggered widespread on-chain selling, further supporting the notion that bulls may successfully defend the $0.73 level. A sustained accumulation phase could catalyze a breakout beyond the $0.84 range high, potentially setting the stage for a bullish trend continuation in the weeks ahead.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
