Cardano Price at Critical Juncture: Will $0.40 Hold the Key?

Cardano Price Faces Key Resistance at $0.40

The Cardano price is currently experiencing a period of stagnation, down approximately 6% over the past week with little movement in the last 24 hours. This lack of action indicates market indecision.

The price has been hovering around a significant trend line without breaking through it, raising questions about whether this is due to buying support or sellers waiting to act.

Trend Support and Volume Dynamics

The 20-day exponential moving average (EMA) is a critical level for Cardano. This EMA, which gives more importance to recent price movements, has been a decisive factor in the past. On December 11, losing this level led to a rapid 25% decline. Currently, the EMA holds, but declining On-Balance Volume (OBV) suggests underlying selling pressure.

Between December 28 and January 5, Cardano's price rose while OBV fell, indicating distribution rather than accumulation. Despite this, the price has not yet broken down, thanks in part to on-chain activity.

Whale Accumulation Stabilizes Price

Large holders, or 'whales', have been buying the dip, preventing a price collapse. Data shows an increase in wallets holding 1 to 10 million ADA and 10 to 100 million ADA, collectively adding close to 100 million ADA since January 11, equivalent to about $40 million at current prices.

The Money Flow Index (MFI) also indicates increasing buying pressure, despite mixed market sentiment.

Derivatives and the $0.40 Threshold

Derivatives data reveals caution among traders, with smart money positioning remaining unchanged and top traders net short. This suggests anticipation of a move without committing to an upside.

Since January 7, Cardano has been trading between $0.37 and $0.40. Breaking above $0.40 could signal a trend recovery, especially if OBV stabilizes. Conversely, a close below $0.37 might lead to further declines, targeting $0.35 or lower.