The Cardano price has risen again, but the outcome is the same as before. Since January 20, ADA has gained about 7 percent and briefly increased. After that, the rise stopped and the price was back at around 0.35 USD. That was not a breakout. It was just another jump that did not bring any further upward movement.
Three reasons explain why the price jumps of Cardano repeatedly fail and why the situation does not change.
Reason 1: Weak bullish divergence triggers price jump
The last jump was triggered by a hidden bullish divergence in the twelve-hour chart. From late December to January 20, the ADA price made a higher low while the RSI only showed a very flat lower low.
This detail is important. A flat lower low in the RSI means that selling pressure has only eased a little, but buyers have not taken control. Such divergences often lead to only short-term spikes, but not to a longer uptrend.
Exactly that happened. The price of Cardano rose about 7 percent to $0.37 on January 21, but the rise quickly stopped.
Timing is crucial. On January 21, when the price reached $0.37, development activity on Cardano rose to about 6.94, the highest level in about a month.
Development activity shows how much work is happening on the chain and often strengthens confidence in the price. In mid-January, the local ADA high followed directly on the peak of development activity.
However, this support from development did not hold. Activity declined again and the price fell with it. Now the value is around 6.85, but the monthly high has not been reached again. The divergence stopped the sell-off, but it did not bring enough new demand to allow the price to rise further, as development stagnated.
Reason 2: Profit-taking significantly increases with every Cardano price rise.
The bigger problem is what happens after a rise in Cardano.
The 'Spent Coins Age Band' shows how many coins from all age groups are being moved. Higher values indicate that sales are being made and profits taken. In the last month, every price jump of ADA was followed by a strong increase in the activity of moved coins.
At the end of December, the price of Cardano rose by about 12 percent, and during the same period, the activity of moved coins increased by over 80 percent, indicating intensified selling at rising prices. In mid-January, ADA rose by 10 percent and activity shot up almost 100 percent. This shows that many holders used the rise to exit.
This behavior is now returning. Since January 24, the activity of moved coins has already increased by more than 11 percent, from 105 million to 117 million, although the ADA price has not yet broken upwards. This shows that sellers are preparing for a new jump and are not waiting for confirmation.
That’s why momentum keeps disappearing. Every new attempt to increase the price leads to even faster profit-taking than before.
Reason 3: Whales are reducing their positions – sales are not being absorbed.
Normally, whales ensure that this selling pressure is absorbed. At the moment, they are not doing that.
Wallets holding ten to 100 million ADA have reduced their holdings from about 13.64 billion ADA to around 13.62 billion ADA. This is a decrease of about 20 million ADA since January 21. From January 22, wallets with one to ten million ADA fell from about 5.61 billion ADA to approximately 5.60 billion ADA. That’s almost ten million ADA less.
These are not panic sales, but it is a clear decline. If the demand from whales is lacking, profit-taking will no longer be absorbed, and the price is more at risk of falling as soon as selling pressure emerges.
Derivative data clearly shows this weakness. In the next seven days, short liquidations stand at about $107.6 million, while long liquidations are closer to $70.1 million. Shorts are more than 50 percent higher than longs. This indicates that many traders expect rises to fail and not last longer.
This imbalance means that the market quickly expects selling pressure to return when Cardano attempts another rise – especially near resistances.
These Cardano price marks are now deciding the next move.
Price movements are now clearer to see.
Upwards, $0.37 is the first important mark. A clear breakout and holding above would trigger short liquidations and provide relief in the short term. However, $0.39 is even more important. If the price rises above this range, most remaining shorts would be liquidated. That would be an initial sign of a shift in sentiment. Above $0.42, the structure could then appear bullish again.
Downwards, $0.34 is the most important support. If Cardano falls below this, many long positions will be liquidated. This could quickly increase selling pressure as the leverage is unwound.
For Cardano to emerge from this cycle, three things must align: Development activity should reach and hold the recent highs. Trading of old coins should not increase when the price rises. And large investors (also called whales) must become buyers again.
As long as that does not happen, price recoveries in Cardano remain vulnerable.
