The Cardano price recovered along with the overall growth of the crypto market. Over the past 24 hours, the token has gained about 5%. This allowed ADA to recoup almost 10% from the March 4 low and provided short-term relief after several weeks of weak performance. However, this growth does not remove the structural risks that remain around the asset.
A weakening technical picture, increased coin movement on the network, and an imbalance in the derivatives market all point to the same problem. The current rebound may face renewed selling pressure. To understand this risk, you first need to look at the chart structure.
Hidden Bearish Divergence Amid Rising Coin Activity
On the 12-hour Cardano chart, a “head and shoulders” pattern is forming. This model often indicates a possible trend reversal. Formation began in early February. The left shoulder, head, and right shoulder are now clearly visible on the chart. The neckline of this structure is around $0.26.
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On March 4, Cardano briefly tried to break this support. However, the overall crypto market rally pushed the price up. As a result, ADA bounced about 10% from the recent low. Nevertheless, the technical picture still points to possible risks.
Between March 2 and March 4, the Cardano price formed two lower highs. At the same time, the relative strength index (RSI) over the same period showed a higher high.
Bearish Cardano structure. Source: TradingView
RSI is a momentum indicator that measures the strength of price movement by comparing recent gains and losses. If the price in a downtrend forms lower highs while the RSI simultaneously shows a higher high, a hidden bearish divergence occurs. This pattern usually indicates a continuation of the trend and suggests that sellers remain active even during short-term rebounds.
On-chain metric data reinforce these concerns. The Spent Coins Age Band indicator, which tracks the movement of previously held coins on the network, shows a sharp spike in activity related to distribution.
On March 3, about 93 million ADA moved on the network. By March 5, this figure exceeded 143 million ADA, which means coin movement increased by about 54%.
Coin activity rises. Source: Santiment
Although the figure later dropped to nearly 81 million ADA, the spike itself indicates that many holders moved coins during the recent rebound. This may indicate preparation for selling.
The increase in distribution pressure leads to the next risk zone: the behavior of leveraged traders.
Growth of Leveraged Longs Increases Liquidation Risk Amid Weak Spot Demand
On-chain data point to possible selling pressure on ADA, and the derivatives market shows another vulnerability.
According to the Binance ADA/USDT liquidation map, leveraged traders now hold noticeably more long positions than short ones.
Data for the past 30 days show that long liquidations amount to about $22 million, while short liquidations are around $17 million.
This means that the volume of long positions is about 26% higher than shorts. The tilt toward longs is not critical, but still requires caution.
When long positions accumulate in a bearish technical structure, downside volatility can intensify. If the price starts to fall, such positions may be forcibly closed. This triggers liquidations and accelerates the decline.
In a normal situation, strong spot market demand helps absorb this pressure.
Liquidation map. Source: Coinglass
However, the activity of large holders shows that such support is still limited.
Wallet data indicate that most large holder categories have barely increased their balances in recent days.
This refers to addresses with balances from 100 million to 1 billion ADA.
Their balances have generally remained unchanged.
A small amount of accumulation is seen only among the group with balances from 10 million to 100 million ADA. Their total volume rose from 16.67 billion ADA to 16.69 billion ADA. That is just over $5 million at current prices.
Large Cardano holders. Source: Santiment
This increase looks insignificant and does not indicate strong new demand from buyers. Since large holders are mostly passive and coin movement on the network is increasing, the market may lack spot demand to support the price if selling pressure intensifies. In this situation, key Cardano price levels become especially important.
Cardano Price Moves Through Critical Zone Between $0.28 and $0.25
Currently, Cardano is trading around $0.27, which is near the neckline support of the “head and shoulders” pattern. Several levels may determine further price movement.
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The first resistance is around $0.28. Since the end of February, this level has already stopped growth attempts several times. A 12-hour candle close above $0.28 will signal that buyers are starting to regain control.
If momentum increases, the next resistance zone is around $0.29. This is where the right shoulder of the current pattern formed. A stronger breakout above $0.31 will completely cancel the bearish structure. In this case, the price will rise above the top of the pattern, which may indicate a broader trend reversal.
Cardano price analysis. Source: TradingView
However, the risk of decline remains if support does not hold. A drop below $0.25 will confirm a break of the “head and shoulders” pattern. In this case, Cardano may fall to $0.21, which means a potential decrease of about 18% from the neckline.
So far, a rally of about 10% has helped ADA postpone this scenario. But the combination of hidden bearish divergence, increased coin movement on the network, and a significant volume of leveraged long positions shows that the market may face a serious test in the coming days.
At the moment, only a 12-hour candle close above $0.28 can ease these risks.
