Cardano’s price dipped 1.35% on Wednesday, trading at $0.345 as it continues the sideways trend that has persisted since June. The cryptocurrency is showing signs it may break out of this months-long consolidation period.

Is Cardano Poised to Break Its 4-Month Trading Range?

The layer 1 blockchain’s native ADA token has traded sideways for the past four months, holding above the $0.03 support level. Recent bullish momentum at the lower range has shifted market sentiment and may signal an impending trend change.

On the daily chart, this consolidation has formed a symmetrical triangle pattern. Such patterns typically result in sideways price action between converging trendlines before an eventual breakout.

At press time, ADA was trading at $0.353 with a $12.37 billion market cap. A breakout from this accumulation zone could drive the price up 11.5% to challenge resistance at $0.4.

The 200-day EMA aligns closely with the upper trendline, creating a strong resistance zone. A decisive break above this level would likely end the multi-month consolidation and pave the way for further gains.

Post-breakout, ADA could rally 15% to test resistance at $0.457, followed by $0.52.

ADA Whales Accumulating as Key Metric Signals Potential Bottom

On-chain data from Santiment shows the 30-day MVRV ratio recently dropped below -5.72%. Negative values typically indicate short-term traders are at a loss, often preceding an influx of long-term buyers. Historically, MVRV ratios below -5% have signaled local market bottoms for ADA.

Additionally, large ADA holders controlling 1-10 million coins have increased their positions from 5.57 billion to 5.77 billion ADA, a 3.59% rise. This whale accumulation suggests growing confidence among major investors in Cardano’s long-term prospects.

Such accumulation by large holders frequently precedes upward price movements.

However, if ADA fails to break above the upper trendline, the consolidation could continue for weeks or months to come.

Frequently Asked Questions (FAQs)

What chart pattern is Cardano currently forming?
Cardano is forming a symmetrical triangle pattern, which has been the main driver of its 4-month consolidation

What does the current MVRV ratio indicate?
The 30-day MVRV ratio dropping below -5.72% signals that many short-term traders are at a loss, potentially attracting long-term buyers and forming market bottoms.

What are the key price levels to watch if Cardano breaks out?
A breakout above the $0.4 resistance and the 200-day exponential moving average could drive Cardano to challenge the $0.457 resistance, followed by $0.52.