Cardano Price Signals Potential Trend Reversal as ADA Tests Key Breakout Zone

Cardano (ADA) price action is showing early signs of a potential trend reversal as the asset rebounds roughly 13% from its December 25 low. While ADA remains down nearly 10% on a monthly basis, recent technical and on-chain signals suggest the current move may be more than just a short-term relief bounce. Traders and investors are closely watching whether ADA can confirm a breakout from a falling wedge pattern that has defined its downtrend since early November.

The falling wedge structure, typically considered a bullish reversal pattern, has guided ADA price lower for weeks. Recently, ADA approached the wedge’s upper trendline near the $0.38 resistance zone. A daily close above this level would confirm a breakout and open the door for a move toward $0.42 in the near term. Based on the wedge’s measured move, a confirmed breakout could eventually project an upside target toward the $0.69 region, representing a potential upside of nearly 79% from current levels.

Momentum indicators are reinforcing this bullish scenario. The Relative Strength Index (RSI) has formed a clear bullish divergence, with RSI making higher lows between December 1 and December 25 while ADA price printed lower lows. This divergence indicates weakening selling pressure and has already helped trigger the recent bounce. A sustained move above $0.38 would strengthen the case for a broader trend reversal rather than a temporary rebound.

On-chain data further supports the bullish outlook. Large Cardano holders, commonly referred to as whales, have been accumulating ADA as these breakout signals emerged. Wallets holding between 100 million and 1 billion ADA increased their combined balances by approximately 110 million ADA, signaling growing confidence among large investors. At the same time, on-chain coin activity has declined by over 20%, suggesting fewer older coins are being moved and sold, which reduces overall sell pressure.

Key resistance levels will ultimately determine ADA’s next major move. Reclaiming $0.47 would mark a significant structural shift, as this level previously rejected price advances in November and December. Above $0.51 and $0.55, bullish momentum could accelerate, making the $0.69 projection increasingly realistic. However, if ADA falls below $0.34, the breakout thesis weakens and the falling wedge remains in play.

As ADA tests these critical levels, the coming days could prove decisive for Cardano’s short- to medium-term trend.