Cardano Price At Multi-Year Support That Previously Led To 200% Rally – ADA Recovery Ahead?

As Cardano (ADA) retests a key multi-year level that previously led to significant price increases, some analysts point to on-chain and derivative signals suggesting a potential price recovery for the altcoin.

Cardano Retests Key Macro Support

On Tuesday, Cardano dropped 3% to retest a crucial macro support level. The altcoin has been trading between $0.25-$0.30 since the early February market crash, failing to break out of the range’s upper boundary over the past two months.

ADA’s price has retraced to the lower levels of its one-month accumulation zone, hovering between $0.25-$0.27 during recent market volatility. Market observer Ali Martinez pointed out that the cryptocurrency has been retesting a key multi-year level amid this performance.

According to the post, Cardano is retesting the $0.25 area, a major support zone since 2022, in the weekly timeframe. This level marked the bottom of the previous bear market and served as a key area at the start of the latest bull run.

As Martinez noted, the last two times ADA traded around and held this level, back in 2023, it bounced 85% and 200%. The first bounce led to a retest of the $0.46 area, while the second drove the price toward the $0.80 level between October 2023 and March 2024.

The analyst also highlighted that ADA recently printed a buy signal, signaling a potential recovery soon. “The TD Sequential indicator has flashed a ‘black 9’ on the weekly chart, suggesting the recent downtrend has exhausted,” he wrote, adding that this setup typically anticipates one to four weeks of expansion.

As a result, ADA could target $0.32-$0.37 by late April if it holds above its current price levels. “We’ve survived the 6-month grind; now we watch for a potential price recovery,” Martinez asserted.

ADA Flashes Bottom Signals

Adding to the momentum, analytics firm Santiment has underscored multiple on-chain and derivative signals that could indicate a reversal is nearby for Cardano.

According to the post, Cardano’s average active wallets have experienced a 43% negative return on their investments over the past year, suggesting a price rebound is more likely than usual.

Despite the 71% price decline since September, this extremely negative MVRV value generally indicates that ADA is in an “opportunity” or “buy” zone, Santiment affirmed, further explaining that when average returns are significantly negative, it signals an impending turnaround:

In addition, the firm stated that Cardano’s funding rate on Binance is experiencing the largest imbalance toward shorts since June 2023, suggesting traders are heavily inclined toward further downside.

“Traders are clearly expecting that the #12 market cap will continue to decline in value,” the firm pointed out, noting that “this historically is another bottom signal, as funding rates are always prone to liquidate and send prices in the direction that traders are expecting the least.”