3 Reasons Why Every Cardano Price Bounce Might Fail Under $0.37

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Ah, the Cardano price has decided to play hopscotch again, but much like my attempts at adulting, the outcome seems all too familiar. Since January 20, ADA has climbed a modest 7%, momentarily soaring before promptly stalling like an old car in need of a jump start, landing back near $0.35. Spoiler alert: this was not the breakout party everyone was hoping for. It was merely another bounce that fizzled out faster than a soda left open overnight.

Now, letā€™s dive into three compelling reasons that explain why Cardanoā€™s price bounces are akin to a cat chasing its own tail-entertaining but ultimately fruitless.

Reason 1: A Weak Hidden Bullish Divergence Sparked the Bounce

The latest bounce was sparked by a hidden bullish divergence on the 12-hour chart. Between late December and January 20, the ADA price generously offered a higher low while the RSI responded with a rather unimpressive lower low, like a student turning in a half-finished assignment.

That detail matters more than you might think. A shallow RSI lower low indicates that sellers have eased up a smidgen, not that buyers have taken the reins. This kind of divergence typically leads to short-lived rebounds rather than the long-awaited sustained rallies we all dream about.

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Indeed, thatā€™s precisely what transpired. Cardanoā€™s price bounced about 7% to $0.37 on January 21, but the excitement was short-lived.

Why, you ask? Well, on January 21, right when the price flirted with $0.37, Cardanoā€™s development activity score peaked at a thrilling 6.94, its highest level in nearly a month. Development activity is like a pulse check on how much work is happening on the chain and can often lend a reassuring pat on the back to price confidence. In mid-January, the local ADA price peak conveniently followed a local peak in development activity.

But alas, that development-led support was as reliable as a chocolate teapot. Development activity took a nosedive, dragging the price down with it. While it’s around 6.85 now, the month-high level remains elusive. The divergence might have halted the sell-off, but it didnā€™t conjure enough demand to push higher as development stalled, leaving us all wondering if Cardano’s price was playing hide and seek.

Reason 2: Profit Booking Spikes Every Time the Cardano Price Rises

The bigger issue is what happens after Cardano starts to ascend.

The spent coins age band tracks how many coins of all ages are being moved. Rising values usually signal selling and profit booking-essentially, it’s like watching your friends leave a party as soon as the pizza arrives. Over the past month, each price bounce has been closely followed by a swift uptick in spent coins activity.

In late December, Cardanoā€™s price climbed about 12%, while spent coins activity jumped over 80%, showcasing a grand spectacle of aggressive selling into strength. Similarly, in mid-January, ADA rose about 10%, and spent coins activity surged nearly 100%, confirming that holders were using the rally as their exit strategy. Classic!

And guess what? This same pattern is rearing its head once more. Since January 24, spent coins activity has already increased over 11% from 105 million to 117 million, despite the ADA price not breaking higher yet. This signals that sellers are preparing for another bounce rather than waiting for confirmation, like those eager folks who rush to the buffet before it officially opens.

This is why momentum keeps fading. Each rally attempt is met with quicker profit-taking than the last, making it feel like weā€™re stuck on a merry-go-round that just wonā€™t stop.

Reason 3: Whales Are Reducing Exposure, Not Absorbing the Selling

Normally, youā€™d expect whales to absorb this type of selling pressure. But right now? Theyā€™re not exactly stepping up to the plate.

Wallets holding between 10 million and 100 million ADA have reduced their balance from approximately 13.64 billion ADA to about 13.62 billion ADA-a drop of around 20 million ADA since January 21. Meanwhile, wallets holding between 1 million and 10 million ADA have shed close to 10 million ADA, slipping from about 5.61 billion ADA to roughly 5.60 billion ADA since January 22.

These arenā€™t panic exits, mind you, but they are clear net reductions. The absence of whale demand means profit-taking isnā€™t being absorbed, leaving the price more vulnerable to downside pressure when it inevitably comes knocking.

And if that werenā€™t enough, derivatives data reinforces this weakness. Over the next seven days, short liquidations stand near $107.6 million, while long liquidations hover around $70.1 million. Shorts outweigh longs by more than 50%, indicating traders are bracing for more failures than successes.

This delightful imbalance suggests the market expects selling pressure to come rushing back if Cardano tries for another bounce, particularly near resistance points. It’s all quite thrilling, isnā€™t it?

Cardano Price Levels That Decide What Happens Next

So, what does the price structure tell us now? Brace yourself for some clarity.

On the upside, $0.37 remains the first critical level. If it manages to break and hold above it, we might just trigger some short liquidations and offer a temporary sigh of relief. However, $0.39 is where the real drama lies. A move above this zone would liquidate most remaining shorts and signify the first meaningful shift in momentum, like finally finding that missing sock. Beyond that, $0.42 is the level where the broader structure could start to look bullish again.

On the downside, $0.34 is the key support. Losing this level would swiftly liquidate a large portion of remaining long positions and could accelerate downside pressure faster than a rollercoaster ride.

For Cardano to escape this never-ending cycle, three things must align perfectly. Development activity needs to step up and hold above recent highs. Spent coins activity must slow its gallop instead of racing into bounces. And, crucially, whales need to return as net buyers, turning the tide of fortune.

Until then, Cardanoā€™s price bounces will remain as vulnerable as a cat on a hot tin roof.

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2026-01-24 17:56