3 Reasons Why Every Cardano Price Bounce Might Fail Under $0.37

What Happened

Reason 1: A Weak Hidden Bullish Divergence Sparked the Bounce

Want more token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here

The bigger problem is what happens after Cardano starts moving up.

Market Context

The Cardano price has bounced again, but the outcome looks familiar. Since January 20, ADA climbed roughly 7%, briefly pushing higher before stalling and settling near $0.35. This was not a breakout. It was another bounce that failed to build follow-through.

Three factors explain why Cardano’s price bounces keep failing, and why the same setup remains in place.

The latest bounce was triggered by a hidden bullish divergence on the 12-hour chart. Between late December and January 20, the ADA price made a higher low while the RSI printed a very shallow lower low.

That is exactly what happened. Cardano’s price bounced about 7% to $0.37 on January 21, but the move stalled quickly.

The timing explains why. On January 21, when the price approached $0.37, Cardano’s development activity score peaked near 6.94, its highest level in about a month.

Development activity reflects how much work is happening on the chain and often supports price confidence. In mid-January, the local ADA price peak closely followed a local peak in development activity.

That development-led support did not hold. Development activity slipped, taking the price down with it. It has now risen to around 6.85, but the month-high level hasn’t been broken. The divergence stopped the selloff, but it did not create enough demand to push higher as development stalled.

Reason 2: Profit Booking Spikes Every Time the Cardano Price Rises

The spent coins age band tracks how many coins of all age groups are being moved. Rising values usually signal selling and profit booking. Over the past month, each price bounce has been followed by a sharp rise in spent coins activity.

In late December, Cardano’s price climbed by roughly 12%, while spent coins activity jumped by more than 80%, showing aggressive selling into strength. In mid-January, ADA rose about 10%, and spent coins activity surged by nearly 100%, again confirming that holders used the rally to exit positions.

The same behavior is returning now. Since January 24, spent coins activity has already increased by more than 11% from 105 million to 117 million, even though the ADA price has not broken higher yet. That suggests sellers are positioning ahead of another bounce rather than waiting for confirmation.

These are not panic exits, but they are clear net reductions. That lack of whale demand means profit-taking is no longer being absorbed, leaving the price more exposed to downside pressure once it arrives.

This imbalance suggests the market expects selling pressure to return quickly if Cardano attempts another bounce, especially near resistance.

Cardano Price Levels That Decide What Happens Next

The price structure now makes things clearer.

Why It Matters

That detail matters. A shallow RSI lower low suggests selling pressure eased slightly, not that buyers took control. This type of divergence usually leads to short-lived rebounds, not sustained rallies.

Derivatives data reinforces this weakness. Over the next seven days, short liquidations stand near $107.6 million, while long liquidations sit closer to $70.1 million. Shorts outweigh longs by more than 50%, showing that traders are expecting rallies to fail rather than extend.

Details

This is why momentum keeps fading. Each rally attempt is met with faster profit-taking than the last.

Reason 3: Whales Are Reducing Exposure, Not Absorbing the Selling

Normally, whales help absorb this type of selling pressure. Right now, they are not.

Wallets holding between 10 million and 100 million ADA have reduced their balance from roughly 13.64 billion ADA to about 13.62 billion ADA, a drop of around 20 million ADA since January 21. Starting January 22, wallets holding between 1 million and 10 million ADA have slipped from about 5.61 billion ADA to roughly 5.60 billion ADA, shedding close to 10 million ADA.