Cardano price is up about 13% from its December 25th low. It is now moving into a breakout zone within a falling wedge structure. ADA is still down nearly 10% this month, but this week has seen more than just a rebound in relief.
Currently, if price confirms a breakout, there are three signals that suggest the trend may be preparing for a reversal.
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Falling wedge finds opportunity for reversal
A falling wedge pattern has led to a decline in prices since early November. ADA tested the upper trendline of its wedge near $0.69. A daily close above that line could open up a 79% upside target towards the same $0.69 level. That goal is achieved by measuring the vertical distance between the lowest swing that touches the trend line within the wedge and the highest swing within the wedge and projecting it upward from the breakout point.
If a breakout occurs, it could be a price prediction for ADA.
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The RSI (Relative Strength Index, which measures momentum and identifies overbought or oversold strength) supports that idea.
Between December 1st and December 25th, ADA hit further lows. During the same period, the RSI has made further new lows. This is a bullish divergence. Despite the price hitting a new low, it shows that sellers are losing strength.
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This divergence caused the current 12.8% rebound. If ADA crosses $0.38, the RSI divergence could act as a trend reversal signal rather than just a pullback signal.
More whales, less coin activity
Whales holding between 100 million and 1 billion ADA increased their balances as signs of a breakout appeared. On December 26th, it held 3.72 billion ADA. That number increased to ADA 3.83 billion, an increase of approximately $41 million.
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The rally started the day after the RSI divergence flashed and continued to rise as the price headed towards the wedge resistance. This timing is important because whales often accumulate before, rather than after, a trend change.
Coin activity, as measured by the age band of spent coins, which tracks how much supply is moving on-chain from young and old wallets, has fallen sharply. Approximately 149.43 million ADAs were registered on December 27th. It then declined by 22% to 116.16 million ADA.
Low coin activity means fewer old coins are coming back to the market. This reduces selling pressure. An increase in whale purchases while the coin’s activity decreases creates conditions that support a breakout. These two signals match the wedge and RSI setup.
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Determine if Cardano price level $0.69 is possible
ADA is trading around $0.38. A wedge breakout is confirmed if the daily close is above $0.38. If this happens, a move towards $0.42 is possible structurally. A return to $0.47 is especially important as ADA failed to recover that level on November 17th and December 9-10th as well.
A retake of $0.47 would indicate a change in the trend structure. Momentum increases above $0.51 and $0.55, making the path to the $0.69 prediction more realistic.
If ADA loses $0.34, the descending wedge remains active, but the breakout potential weakens.
The ADA has now been conducting its most important tests for more than a month. Wedge and RSI are suggesting a reversal. Whales are buying. Coin activity is declining. However, these tips will not become a trend unless a breakout above $0.38 and strength towards $0.47 is confirmed.
