The price of Cardano may be approaching a decision point. Although the price remains under pressure, a technical setup is forming beneath the surface. The same structure that preceded a 32% rally at the end of last year is appearing again, but this time it is being reinforced by specific on-chain behavior from whales and long-term holders.
The question is no longer whether a signal exists. It is whether the accompanying behavior is strong enough to sustain it.
A well-known bullish pattern is reappearing, and whales are positioning themselves early.
Cardano is in the process of forming a bullish divergence on the daily chart. A bullish divergence occurs when the price makes a lower low, but the momentum, measured by the Relative Strength Index (RSI), rises. The RSI compares recent gains and losses to assess whether selling pressure is decreasing.
This setup has been important for Cardano before. Between November 4 and December 31, 2025, ADA marked a lower low while the RSI formed a higher low. That divergence indicated exhaustion in selling pressure, and there was subsequently a 32% rally.
A similar structure is developing now between November 4, 2025, and January 19, 2026, as long as the price remains above the $0.35 zone.
What reinforces this signal is the behavior of whales. Wallets holding between 1 million and 10 million ADA have been accumulating since January 12.
Their combined holdings rose from approximately 5.51 billion ADA to 5.61 billion ADA, an increase of nearly 100 million ADA, or 1.8%, in less than two weeks. At the current price, this represents over $36 million in additional exposure.
This type of accumulation usually occurs before changes in momentum, not after. But momentum alone is not enough. The behavior of other groups of holders determines whether the setup can advance.
Holders are holding firm as short-term activity increases.
To understand the risk within the setup, it is useful to look at the activity of spent tokens. This activity shows how many tokens are moving on-chain and allows us to see who is selling and who remains inactive.
Long-term holders, defined here as wallets holding ADA for 180 to 365 days, show a lot of conviction. Their spent coin activity fell from about 67.47 million ADA on January 14 to nearly 174,000 ADA.
That's a decline of more than 99%, bringing activity to a monthly low. In simple terms, long-term holders are not selling in the face of weakness.
Short-term holders tell a very different story. Tokens held for 30 to 60 days have suddenly become much more active as the bullish pattern forms.
The activity of spent coins for this group increased from about 3.6 million ADA on January 18 to approximately 14.84 million ADA, an increase of almost 312% in a short time.
This divergence is important. The strong inactivity of HODLers supports the lower price and reduces the risk of panic. At the same time, the increase in short-term activity introduces supply risk if the price starts to bounce.
This exact imbalance may have limited the previous Cardano rally driven by the RSI before it could become a sustained trend.
If this setup leads to a bounce, it now depends on how the price reacts at key levels.
The levels of ADA's price and other metrics decide whether the story repeats itself.
The last time Cardano rose by 32%, the movement ultimately failed because the price of ADA could not recover the 50-day exponential moving average (EMA). An EMA gives more weight to recent prices, making it more sensitive to trend changes. During that rally, ADA stopped near the 50-day EMA, which is now close to $0.41.
That level is once again the first major obstacle. If the current RSI divergence is confirmed and the price rises, a daily close above $0.41 would signal that short-term momentum is finally in line with the setup.
Above that level, $0.43 becomes the next resistance, followed by $0.48, which coincides with the 200-day EMA and would mark a more significant trend change.
The capital flow adds a significant difference this time. The Chaikin Money Flow (CMF), which shows whether capital is entering or leaving an asset, is trending upward even as the price has decreased. Previously, the CMF did not stay above the zero line during rallies, indicating weak inflows.
This time, the CMF has risen more and remained positive, suggesting that there was accumulation even when Cardano's price fell. Whale buying, mentioned earlier, also helped the CMF rise.
On the bearish side, the setup remains conditional. A sustained drop below $0.35 would weaken the bullish divergence and open the way towards $0.32, delaying any repeat scenario.
