As of Friday evening, Cardano (ADA) remains steady at the 0.80 USD mark, as buying power attempts to offset the 3.26% drop from the previous session. This recovery momentum sparks hopes for a breakout from the falling wedge pattern on the 4-hour frame, amidst a backdrop of optimistic sentiment continuing to spread in the derivative market. However, on-chain data raises alarm bells as actual profits diminish and network activity stagnates.
On-chain data shows potential weakness
The Network Realized Profit/Loss index (NRPL) – a measure of the profit or loss that investors have realized through on-chain transactions – is showing a poor signal. According to data from Santiment, Cardano's NRPL is only 3.48 million ADA, a significant drop from 13.98 million ADA recorded on Thursday. This clearly reflects the decline in the number of investors taking profits, indicating that the price increase momentum is weakening.
Alongside this, the number of daily active wallets on the Cardano network also decreased from 24,955 to 24,455 on Friday, indicating a slowdown in network activity. Compiling on-chain data, it can be seen that ADA is in a "hair's breadth" state, as the upward momentum is becoming increasingly fragile in the context of a gradually less vibrant network.
Source: Santiment## Cardano is nearing a breakout from the falling wedge pattern
In the latest trading session, ADA recorded an increase of over 2%, approaching the resistance line on the 4-hour timeframe – formed by connecting the peaks of August 14 and August 25. This resistance line, along with the support line connecting the lows of August 20 and September 1, has drawn the falling wedge pattern.
If the price of ADA closes decisively above the 200-period EMA at the level of 0.8335 USD, the breakout of the pattern will be confirmed, opening up room for a new rally targeting the R1 pivot level at 0.8913 USD.
Open interest of ADA | Source: CoinglassNotably, the open interest (OI) of Cardano has remained above 1.57 billion USD since the breakout in mid-August, reflecting a stable optimistic sentiment from the derivatives trading community.
However, the technical signals on the 4-hour frame are still quite mixed after the recent strong correction. The MACD line is preparing to cross above the signal line – a move that could trigger a bullish reversal, just one day after sending out a bearish signal on Thursday. At the same time, the RSI is at 52, slightly above the neutral threshold of 50, indicating that buying pressure is increasing.
ADA/USDT chart 4-hour | Source: TradingViewOn the other hand, the downward trend of the 50-period EMA and the cross below the 200-period EMA has formed a Death cross pattern – which is a negative signal.
In an unfavorable scenario, if ADA cannot break above the 200-period EMA, the price is likely to oscillate within the falling wedge, with the nearest support area located at 0.7788 USD.
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
Price Prospects for Cardano: ADA is on the verge of a new breakout
As of Friday evening, Cardano (ADA) remains steady at the 0.80 USD mark, as buying power attempts to offset the 3.26% drop from the previous session. This recovery momentum sparks hopes for a breakout from the falling wedge pattern on the 4-hour frame, amidst a backdrop of optimistic sentiment continuing to spread in the derivative market. However, on-chain data raises alarm bells as actual profits diminish and network activity stagnates.
On-chain data shows potential weakness
The Network Realized Profit/Loss index (NRPL) – a measure of the profit or loss that investors have realized through on-chain transactions – is showing a poor signal. According to data from Santiment, Cardano's NRPL is only 3.48 million ADA, a significant drop from 13.98 million ADA recorded on Thursday. This clearly reflects the decline in the number of investors taking profits, indicating that the price increase momentum is weakening.
Alongside this, the number of daily active wallets on the Cardano network also decreased from 24,955 to 24,455 on Friday, indicating a slowdown in network activity. Compiling on-chain data, it can be seen that ADA is in a "hair's breadth" state, as the upward momentum is becoming increasingly fragile in the context of a gradually less vibrant network.
In the latest trading session, ADA recorded an increase of over 2%, approaching the resistance line on the 4-hour timeframe – formed by connecting the peaks of August 14 and August 25. This resistance line, along with the support line connecting the lows of August 20 and September 1, has drawn the falling wedge pattern.
If the price of ADA closes decisively above the 200-period EMA at the level of 0.8335 USD, the breakout of the pattern will be confirmed, opening up room for a new rally targeting the R1 pivot level at 0.8913 USD.
However, the technical signals on the 4-hour frame are still quite mixed after the recent strong correction. The MACD line is preparing to cross above the signal line – a move that could trigger a bullish reversal, just one day after sending out a bearish signal on Thursday. At the same time, the RSI is at 52, slightly above the neutral threshold of 50, indicating that buying pressure is increasing.
In an unfavorable scenario, if ADA cannot break above the 200-period EMA, the price is likely to oscillate within the falling wedge, with the nearest support area located at 0.7788 USD.
SN_Nour