Is Cardano Setting Up a Breakout to $0.34 as Selling Incentives Drop 75%?
Cardano shows technical signs of a potential breakout toward $0.34 due to a 75% drop in profitable supply and bullish divergence, pending volume confirmation.Summary
Despite a recent 4% drop in price, Cardano (ADA) exhibits signals suggesting selling pressure is diminishing, potentially setting up a breakout toward $0.34. On-chain data reveals that the share of ADA supply in profit has plummeted by about 75% since January, significantly reducing the incentive for profit-taking, with profitable supply near six-month lows. Furthermore, coin activity has declined by 45% since a recent sell-off, indicating long-term holders are holding steady.
Technically, on the 4-hour chart, ADA is forming an inverse head-and-shoulders pattern, a potential bottoming signal, though it requires a close above the $0.275–$0.280 zone to activate. This is supported by a developing bullish divergence on the Relative Strength Index (RSI), where price makes lower lows while RSI makes higher lows, suggesting weakening selling momentum.
However, the potential rally hinges on volume. The On-Balance Volume (OBV) is still trending lower, indicating recent rebounds lack sustained demand. A confirmed break above $0.275, supported by expanding volume, could target $0.285 and subsequently $0.346. Key support lies at $0.259, with full invalidation occurring below $0.220.
(Source：BeInCrypto)