Since the December 25th cyclical low, the price of Cardano (ADA) has rebounded by approximately 13%, gradually approaching a key technical inflection point. Although ADA has still declined nearly 10% this month, the current upward movement is not merely a rebound but a potential trend reversal window driven by multiple technical and on-chain signals simultaneously improving.
From a technical perspective, ADA has been trading within a descending wedge pattern since early November. Recently, the price has touched the upper boundary of the wedge near the $0.38 to $0.39 region, which is a critical zone for determining whether the trend will reverse. Once a daily close above this trendline is confirmed, the measured target of the wedge suggests a potential rise to $0.69, indicating significant medium-term recovery potential.
Momentum indicators also send positive signals. Between December 1 and December 25, ADA’s price continued to make new lows, but the Relative Strength Index (RSI) rose in tandem, forming a classic bullish divergence. This suggests selling pressure is waning and bearish momentum is weakening. The subsequent approximately 12.8% rebound is the first step in the RSI divergence playing out. If the price confirms a breakout above $0.38, this divergence is more likely to evolve into a trend reversal signal rather than a short-term rebound.
On-chain data further reinforce this assessment. Whales holding between 100 million and 1 billion ADA significantly increased their holdings after December 26, with holdings rising from 3.72 billion to 3.83 billion ADA, an increase equivalent to about $41 million. Whales often position themselves before trend initiations, making their behavior an important forward-looking indicator. Meanwhile, the spent output age band shows a clear decline in on-chain old coins, with related metrics dropping about 22% since December 27. This indicates selling pressure is easing, providing a more solid supply environment for upward price movement.
Looking at key price levels, $0.38 is a short-term critical support/resistance level. Holding above this level could see ADA challenge $0.42 and $0.47 sequentially. Notably, $0.47 has been a core resistance level where multiple rebounds failed previously. Successfully reclaiming this level would mark a substantial change in trend structure, with subsequent upside targets extending to $0.51, $0.55, and ultimately towards the $0.69 zone. Conversely, if the price drops below $0.34 again, the descending wedge pattern would remain intact, and the reversal outlook would be significantly weakened.
Overall, Cardano is currently at its most critical technical juncture in over a month. The simultaneous appearance of a descending wedge, RSI divergence, whale accumulation, and weakening selling pressure significantly increases the probability of an “ADA breakout imminent.” However, the final confirmation of the trend still depends on whether the price can effectively hold above $0.38 and advance towards $0.47.
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