This month, Cardano stands out as one of the large-cap cryptocurrencies with the weakest performance. The price of ADA has fallen nearly 30% in the past 30 days and lost about 26% since November 11. This downward trend has brought ADA close to the lowest support zone of the falling wedge pattern – a technical structure that typically has a bullish trend but can shift to a long-term bearish trend if broken.
However, amid strong selling pressure, three important indicators have shown positive signals just as Cardano is testing the final large-cap support zone.
Early signals of buying strength at an important support zone
Both indicators measuring buying strength and trading volume behavior have simultaneously turned positive as the price of Cardano hits the support zone of $0.45.
The Chaikin Money Flow indicator (CMF) monitors the inflow/outflow of money based on price and trading volume. CMF has continuously fallen since November 10 and even dropped below the 0 threshold during the strong correction of ADA. However, from November 16 to November 19, CMF formed a higher peak while the price created a lower peak – an important bullish divergence, indicating stronger inflows compared to what the price chart reflects.
Cardano CMF shows divergence | Source: TradingViewThe On-Balance Volume indicator (OBV) helps to determine whether buyers or sellers are more active. OBV has been constrained below the downtrend line for several weeks, in line with the steady downtrend of ADA. However, when the price reached the zone of $0.45, OBV broke above this trend line for the first time in a long while, signaling that buying pressure is returning before the price reacts significantly.
Support returning volume | Source: TradingViewWhen both CMF and OBV improve at a large support zone, it is often a sign that the market is preparing for a short-term recovery. However, to confirm this trend, Cardano's price still needs to be further solidified by on-chain indicators.
Investor Behavior: Remarkable Resilience Amidst the Downtrend
The Spent Coins Age Band ( tracks the amount of tokens moving from wallets of different age groups. If many tokens are transferred at once, it is often a sign of panic or strong sell-off. Conversely, when the amount of tokens moving decreases while the price is plummeting, it indicates the resilience of long-term investors.
On November 1st, ADA recorded coin transfer activity reaching a peak with 159.01 million tokens being moved. By November 19th, this index had decreased by about 27%, even though the price continued to fall.
![3 reasons why Cardano price has the potential to recover])https://img-cdn.gateio.im/webp-social/moments-924a477916bd061f9ddf4969069e7470.webp(Less ADA in circulation | Source: SantimentThis indicates that very few tokens were moved during the correction, reinforcing the view that Cardano is making efforts to maintain the support zone instead of experiencing a breakdown. This is the third factor supporting ADA's recovery scenario.
Decisive threshold: Cardano must hold $0.45 to avoid the risk of a sharp fall
Currently, the price of Cardano is trading just above the lower trend line of the falling wedge pattern and the strongest support zone at $0.45–$0.44. If this zone holds when the daily candle closes, ADA will have a chance to recover. Breaking through the $0.50–$0.52 level will be the first signal indicating that strong buying power is returning, but the real recovery momentum will only be established when Cardano regains the $0.60 threshold.
This price level will reverse the short-term trend and open up the possibility of testing the $0.69 zone – where a complete breakout from the wedge pattern could occur. If ADA surpasses this threshold, the recovery trend may turn into a significant growth phase.
![3 reasons why Cardano prices have the potential to recover
])https://img-cdn.gateio.im/webp-social/moments-1bb184850724440b0a2d8f66c9e50abd.webp(Cardano Price Analysis | Source: TradingViewConversely, if the support zone is broken down, the technical structure will weaken. Closing a daily candle below $0.44 will open up the risk of a deep fall to $0.40, or even lower if market sentiment continues to deteriorate. The bullish scenario will no longer be valid if ADA falls below this zone.
Mr. Teacher
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