Cardano (ADA) Nears Critical $0.25 Support as On-Chain Data Signals a Potential Price Reversal - Blockonomi

TLDR:

• Active Cardano wallets are averaging a 43% loss, pushing MVRV deep into historical buy-zone territory.
• Binance funding rates show the highest short-to-long ratio for ADA since June 2023, a classic bottom signal.
• ADA has previously bounced 85% and 200% from the $0.25–$0.26 support zone in prior market cycles.
• A decisive break below $0.25 would invalidate the pattern and open the door for further downside in ADA.

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Cardano (ADA) is trading near $0.26, a level that has drawn attention from analysts tracking on-chain metrics and historical price behavior.

Market data shows active wallets on the Cardano network are averaging a 43% loss on investments. The broader price decline stands at 71% since September.

Analysts now say these conditions historically precede a market reversal rather than continued decline.

On-Chain Metrics Suggest Cardano May Be Approaching a Bottom

The MVRV ratio for Cardano has dropped into deeply negative territory. Santiment reported that active wallets over the past year are netting returns of negative 43%. This reading places ADA firmly in what analysts call an “opportunity” or “buy” zone.

In markets, MVRV values average out to zero across any timeframe. When the metric dips severely below zero, it tends to correct upward over time. That correction comes as average returns normalize, which typically requires price recovery.

Santiment also noted that Cardano’s funding rate on Binance is showing its highest short-to-long ratio since June 2023.

A crowded short position like this creates conditions for a short squeeze. Historically, funding rates tend to reverse sharply, pushing prices in the direction traders least expect.

When bearish sentiment reaches an extreme, professional traders and key stakeholders often view this as reduced risk on the buy side.

Lower prices and high short interest together create a scenario that larger players find attractive for accumulation.

Historical Price Reactions at the $0.25–$0.26 Level Add Weight to the Setup

Analyst Ali Charts pointed out that ADA has tested the $0.25 area twice before. Each prior test produced a strong recovery — one resulted in an 85% rally, and another produced a 200% move. That makes the current price zone structurally notable to market watchers.

However, Ali Charts added that the current approach to support looks different from previous ones. Prior bounces followed sharp capitulation moves.

This time, price has ground lower steadily, showing that sellers have maintained control throughout the decline.

A bounce from this level, if it occurs, would likely target the $0.50–$0.55 range first. That area aligns with prior resistance and represents a realistic mid-range recovery. Reaching a full 200% gain from here would require a broader market catalyst to materialize.

A break below $0.25 would change the picture entirely. It would cancel out the pattern that formed over the previous two tests. In that case, further downside continuation becomes the more probable outcome to watch.