Cardano (ADA) stalled at a technical breakout zone and on-chain signals indicated that the likelihood of a sustained 50% rally had materially declined, according to an analysis published on January 10.
Price action had consolidated around $0.424 after a recent 2% intraday dip and failed to clear immediate resistance near $0.437. The chart structure included a falling wedge—traditionally bullish—and a Money Flow Index divergence that previously flagged buying interest. At the same time, an alternative interpretation placed ADA inside a broader symmetrical triangle near $0.86 with resistance at $0.96.
On-chain data published with the analysis showed a sharp change in holder behaviour that undercut the durability of any rally. The 365‑day to two‑year holder cohort increased distribution activity by about 135% on January 9, signaling reduced conviction among longer-term investors. At the same time, short‑term holders sharply cut selling activity—down roughly 92%—and appeared to be absorbing that supply.
That dynamic left buying pressure skewed toward speculative, short‑term flows rather than conviction-led accumulation. The report noted this market structure as inherently fragile and prone to rapid reversals if sentiment turned.
Derivatives, macro risks and the asymmetric downside
The derivatives landscape amplified downside risk. The analysis cited cumulative long liquidation leverage of $26.66 million versus $14.11 million on shorts, creating an elevated long‑squeeze vulnerability. In such a configuration, even a modest pullback could cascade liquidations and magnify downward moves.
Macro and geopolitical elements reinforced a risk‑off backdrop. The report linked recent geopolitical tensions in South America and a stronger U.S. dollar to dampened risk appetite, which had pressured crypto flows and constrained upside even when technical indicators briefly looked constructive.
Technical momentum indicators at the time—MACD positive but fading and an RSI around 59—were consistent with a mixed near‑term outlook.
Investors were advised to watch whether long‑term holders returned to accumulation and whether derivatives leverage materially rebalanced; either development would be required to underpin a durable advance. Absent those shifts, any breakout that pushed toward the $0.505 or higher targets was likely to remain fragile and vulnerable to reversal.
