The price of Cardano is forming a symmetrical triangle pattern, while whale accumulation and the MVRV ratio signal a potential bottom formation.
On Wednesday, Cardano's price dropped by 1.35%, currently trading at $0.345. This slight decline suggests that Cardano continues its sideways trend, which has been in place since June 2024. However, renewed momentum could push ADA out of its current consolidation.
Will Cardano Break Its 4-Month Consolidation?
Cardano, a layer-1 cryptocurrency, has been in a sideways trend for the past four months, indicating its ability to hold above the $0.03 level. Bullish activity near the lower support hints that the market sentiment might shift.
The daily chart shows a symmetrical triangle pattern, which theoretically reflects sideways movement between two converging trendlines. This pattern could signal a potential breakout and a return to upward momentum.
At the time of writing, Cardano was trading at $0.353, with its market capitalization rising to $12.37 billion. If the triangle pattern acts as an accumulation zone, ADA's price could rise by 11.5%, challenging the overhead resistance at $0.4.
Key Levels for a Breakout
The 200-day exponential moving average aligns closely with the upper trendline, creating a strong resistance zone. A potential breakout above this upper line would signal the end of the prolonged consolidation, paving the way for further gains.
If the breakout occurs, the price could rise by 15%, encountering resistance at $0.457, followed by $0.52.
Cardano Whales Accumulate, and MVRV Signals a Bottom
According to data from Santiment, the 30-day MVRV ratio recently dropped below -5.72. A negative value typically indicates that most short-term traders are operating at a loss, which may lead to their exit from the market.
This scenario often attracts long-term buyers. Historically, when the MVRV ratio falls below -5%, it is associated with local market bottom formation.
Additionally, large Cardano holders with wallets containing 1 million to 10 million coins have recently increased their holdings from 5.57 billion to 5.77 billion ADA, representing a 3.59% rise. This increase signals growing confidence among major investors and a potential bullish sentiment.
Risk of Continued Consolidation
If Cardano fails to break above the upper trendline, the price could continue consolidating in the coming weeks or months.
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