The price of Cardano (ADA) shows two reversal patterns: Will the bulls finally take over?

The price of Cardano (ADA) is trading in a stable state, only rising slightly by 2.2% in the past week. However, this sideways trend may soon come to an end. On-chain data indicates that “whales” have returned to the market, while macro factors suggest that the Cardano network is preparing for a major trend shift.

The coming days will play a crucial role in determining whether this slow accumulation process will transform into a strong reversal or continue quietly like previous times.

Whales increase accumulation as the “hibernation” signal becomes clearer

In the last two days, whales holding between 10 million ADA and 100 million ADA have quietly increased their holdings. The total amount of ADA held by this group has risen from 13.16 billion to 13.21 billion, equivalent to an addition of about 50 million ADA, worth nearly 32.5 million USD at current prices.

Cardano whales are active | Source: SantimentAlthough the accumulation rate remains stable, it has not yet shown decisiveness. To strengthen confidence in the positive trend, a stronger increase in buying activity needs to be observed in the upcoming sessions.

At the same time, the Age Group Coin Index — measuring the amount of ADA transferred between wallet groups by age — decreased from 179.16 million ADA on October 11 to 114.71 million ADA on October 25, representing a 36% decrease.

The dormant activity of Cardano needs to peak | Source: SantimentThis decline reflects the decreasing number of ADA circulating in the market, indicating the first signs of a gradually increasing “dormant” state. However, this level has not yet reached the deep “immobile” threshold that often appears before strong bullish rallies.

Currently, this index is still significantly higher than the local bottom of 89.22 million ADA on September 22 - a level that previously triggered a short-term bounce. In other words, the “hibernation” state is improving, but to confirm a real accumulation phase, this index needs to drop to below 90 million ADA.

Overall, the slow accumulation by whales along with the improvement of the “hibernation” index is revealing the groundwork for a new bullish trend, but the final confirmation signal still depends on the reaction of ADA's price at the important resistance zone.

Cardano price approaches breakout zone with increasingly clear reversal signals

On the daily chart, ADA is forming an inverse head and shoulders pattern with a downward sloping neckline — a structure commonly seen before strong bullish reversals. The downward sloping neckline indicates that selling pressure is still present, but ADA's resilience around this area is a positive signal.

Currently, ADA is trading around 0.65 USD, just below the Fibonacci retracement level of 0.236 at 0.66 USD. If the price closes convincingly above 0.66 USD, this could confirm a breakout, opening up the possibility of a rise to the target area of 0.79 USD according to the model's forecast. The next resistance levels are at 0.83 USD and 0.89 USD.

Cardano price analysis | Source: TradingViewAdditionally, the RSI indicator (Relative Strength Index) is also reinforcing the bullish scenario. This indicator is currently showing a positive divergence: from October 11 to 22, the RSI is making higher lows while the price of ADA is making lower lows — a classic signal indicating that selling pressure is weakening and buying pressure is returning. On the daily frame, this type of divergence often signals a shift from a downtrend to an uptrend.

The combination of positive RSI signals and the inverse head and shoulders pattern provides ADA with a solid technical foundation for a potential reversal.

However, the risk still exists as the downward neckline has not been completely broken. If the price cannot be maintained above 0.60 USD, this technical structure will be invalidated, leading to the possibility of ADA dropping to the strong support area at 0.50 USD.

Mr. Teacher