Cardano's Rally Creates Profit-Taking Pressure as 88% of Supply Turns Profitable

• Cardano surges 27% in a week, pushing 88.40% of supply into profit
• MVRV ratio reaches concerning 76.20% level
• Critical support at $0.93 could determine next move

Cardano (ADA) has experienced a remarkable transformation in its market dynamics, with a 27% weekly surge creating both opportunities and potential risks for investors.

The rally has fundamentally altered the profitability landscape for ADA holders, raising important questions about sustainable price momentum.

Majority of Cardano holders in profit

The scale of this shift becomes apparent when examining the profitability metrics. Currently, 32 billion ADA tokens, valued at approximately $31 billion, sit in profit-making positions.

This represents 88.40% of the entire circulating supply—a dramatic increase from the beginning of November when only 40% of tokens were profitable. While this surge demonstrates strong market confidence, it also creates complex market dynamics that warrant careful consideration.

The Market Value to Realized Value (MVRV) ratio, a key metric for assessing market positioning, currently stands at 76.20%. This elevated reading suggests that ADA’s market value has significantly outpaced its realized value, potentially indicating overvaluation.

In practical terms, this means the average holder could realize a 76.20% profit if they were to sell their positions at current prices—a tempting proposition that could trigger widespread profit-taking.

From a technical perspective, ADA currently trades at $0.98, maintaining position above crucial support at $0.93. This level could prove decisive in determining the asset’s next major move. Should profit-taking pressures intensify, a breach of this support might precipitate a decline toward $0.79.

Conversely, if holders demonstrate restraint and maintain their positions, ADA could push beyond the psychologically significant $1 mark toward $1.15, a price point not seen since April 2022.

The coming days will likely prove crucial in determining whether ADA’s impressive rally can sustain itself against growing profit-taking pressures, making the $0.93 support level particularly worth watching for signs of market direction.