Is Cardano Price Ready to Break Out of Its 4-Month Consolidation?

Is Cardano Price Ready to Break Out of Its 4-Month Consolidation?

Cardano, a leading layer-1 cryptocurrency, has been trading sideways for the past four months, maintaining stability above the $0.03 level. A recent uptick in bullish momentum at the support level has shifted the prevailing trend to neutral, suggesting a potential change in market sentiment.

A technical analysis of the daily chart reveals that ADA is currently forming a symmetrical triangle pattern. This pattern typically indicates lateral movement within two converging trendlines, serving as a setup for the next significant price breakout.

At the time of writing, Cardano is trading at $0.353, with a market capitalization of $12.37 billion. If this consolidation zone acts as an accumulation phase, ADA’s price could see an 11.5% increase, potentially rising to test the $0.40 resistance level.

The 200-day exponential moving average, which is aligned with the overhead trendline, presents a high supply zone. A breakout beyond this level could mark the end of the multi-month consolidation, opening the door for a stronger recovery.

Should this breakout materialize, Cardano could rally another 15%, targeting resistance levels of $0.457 and $0.52.

ADA Whales Show Confidence as MVRV Ratio Signals Bottom Formation

According to Santiment data, Cardano’s 30-day MVRV ratio recently dropped below -5.72%. A negative MVRV ratio typically indicates that most short-term traders are operating at a loss, which often results in market exits. However, this also attracts long-term buyers who view such conditions as a buying opportunity. Historically, MVRV ratios below -5% have coincided with the formation of local bottoms.

Adding to this, Cardano’s large holders (wallets containing between 1 million and 10 million ADA) have increased their holdings by 3.59%, accumulating an additional 200 million ADA, bringing their total to 5.77 billion ADA. This growing accumulation suggests increasing confidence among institutional and large-scale investors, signaling a bullish outlook for the long-term value of Cardano.

However, if Cardano fails to break above the overhead trendline, the current consolidation could persist for several more weeks or even months, delaying any significant price movement.