- Cardano (ADA) is struggling to rebound as over 260,000 addresses hold approximately $2.77 billion in ADA, creating a significant resistance range between $0.34 and $0.36, where many holders seek to break even.
- On-chain metrics and a bearish head-and-shoulders pattern suggest that ADA’s price may decline to around $0.32 unless buyers can defend the $0.34 support level.
Cardano (ADA) faces significant resistance, with 260,000 addresses holding approximately $2.77 billion in ADA, mainly clustered within the $0.34 to $0.36 price range. Despite multiple attempts to break past this barrier, on-chain data and recent patterns indicate that ADA’s price may remain capped for the foreseeable future, challenging investors’ hopes for a significant rebound. Here’s a closer look at the factors affecting Cardano’s price action.
Cardano’s Price Under Pressure from Resistance
Cardano’s on-chain metric, known as the In/Out of Money Around Price (IOMAP), categorizes addresses by the average price at which holders bought their ADA tokens. Within the $0.34 to $0.36 range, 6.68 billion ADA tokens were acquired, amounting to a substantial holding of $2.77 billion. This clustering creates a strong resistance zone because many holders who bought at higher prices are eager to sell and “break even,” limiting ADA’s chances for upward movement.
The strong resistance means that even as some investors hope for a price rebound, sellers are likely to push prices down whenever ADA approaches the resistance zone. To move past this barrier, demand would need to outstrip this selling pressure—a tough feat given current market trends.
Short-Term Holders Add to Selling Pressure
The Balance by Time Held metric sheds further light on ADA’s price action by showing that short-term holders—those who acquired ADA within the last 30 days to 12 months—are increasingly selling off their tokens. This selling trend among newer holders indicates weak confidence in ADA’s short-term potential, adding downward pressure to the price. As these short-term holders offload their tokens, ADA’s price faces additional resistance, which compounds the already significant supply held by investors at breakeven levels.
Bearish Patterns on the Charts
Adding to the bearish outlook is ADA’s recent formation of a head-and-shoulders pattern on the daily chart. This technical pattern signals a possible trend reversal from bullish to bearish, and the critical neckline—the point where a downtrend may accelerate—is around $0.34. Since ADA recently dipped below this level, the likelihood of a further decline to around $0.32 is on the rise, according to analysts. However, if buyers step in to defend the $0.34 support level, ADA could see a short-term rally, potentially pushing the price up to $0.42.
Looking Ahead
While Cardano’s rebound potential may seem limited due to high resistance levels and ongoing selling pressure, any increase in buying demand could help ADA break free from this restrictive range. However, investors should remain cautious, as breaking through the $2 billion resistance would require substantial market momentum and bullish support.
About the Author
