Cardano (ADA), one of the top proof-of-stake cryptocurrencies, may be nearing the end of its bear cycle. Despite a nearly 50% drop from its November highs, new on-chain metrics and chart patterns suggest a potential bullish breakout in the weeks or months ahead.
MDIA Indicator Signals Long-Term Confidence
A key bullish sign for Cardano comes from Santiment’s Mean Dollar Invested Age (MDIA) data. The 180-day MDIA has climbed to 10.68, recovering from a negative reading of -3.2 in February. Similarly, the 2-year MDIA has risen to 103, up from a YTD low of 94.
The MDIA tracks the average age of each dollar invested in the asset. A rising MDIA suggests that long-term holders are not moving their tokens, signalling accumulation rather than distribution. Historically, this pattern has preceded major rebounds in price.
ADA in a Technical Tug-of-War
Cardano’s daily chart reflects a mix of bearish and bullish patterns. On the downside, the coin has formed a bearish pennant, a continuation pattern typically leading to further declines. ADA has already fallen from $1.328 in December to around $0.70, forming a series of lower highs and lower lows.
However, the bigger picture shows the formation of a falling broadening wedge—a bullish reversal pattern. This structure, marked by two descending and diverging trendlines, often signals the end of a downtrend and the beginning of a rally.
Short-Term Dip, Long-Term Rebound?
If the bearish pennant plays out, ADA could dip towards the wedge’s lower support near $0.555. This would potentially set the stage for a sharp rebound, with bulls eyeing key resistance levels. A move above $1 would represent a major psychological breakthrough, while retesting the $1.32 high from late 2024 would mark a 90% gain from current prices.
Cardano’s recent underperformance isn’t isolated. Broader crypto markets have pulled back due to profit-taking and geopolitical uncertainty, including fears over Donald Trump’s proposed tariffs. These factors have weighed on sentiment, but the rise in MDIA suggests smart money is quietly accumulating.
Final Thoughts
Cardano may be in the final stages of its downtrend, with a confluence of on-chain strength and chart signals hinting at an upcoming bullish reversal. While short-term risks remain, especially if the price retests lower levels, the overall outlook points to growing investor confidence. For long-term holders, ADA may be gearing up for a significant move.
