Cardano Price Crash Triggers On-Chain Buy Signal, What's Next?

Cardano (ADA) has crashed by 10% in seven days and has been overtaken by Tron (TRX) in market cap ranking. Amid its weak performance, the Market Value to Realized Value (MVRV) ratio signals that Cardano price has entered an “opportunity zone” that could fuel a recovery and possibly stir gains above $3.

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Cardano Price Crashes, But Bullish Pattern Hints Recovery

Cardano price has not been immune to the bearish momentum witnessed across the broader crypto market since the start of the month. Within seven days, ADA has shed more than 10% of its value, with the price dropping from $0.71 to trade a $0.64 at press time. During this time, more than $12 million in ADA long positions have been wiped out, according to data from Coinglass.

Despite the drop, a bullish double-bottom pattern remains in play on the one-month chart. This pattern has been under formation since 2021, and signals that Cardano’s ATH may be imminent.

After this record high, Cardano underwent a steep decline before bouncing back in early 2024. However, the rebound was short-lived, and Cardano price slipped to form its second bottom in Q3 2024 before the resulting uptrend found resistance at the neckline of $0.80.

This double-bottom faces weakness as Cardano fails to turn the $0.80 resistance into support. Closing above this resistance will be the key to a rally that pushes ADA price to $3.10.

Technical indicators also show a mixed outlook. After facing a steep decline earlier this month, the RSI has stabilized at around 51, which shows uncertainty as neither buyers nor sellers have the upper hand. The AO histogram bars also show that the bullish momentum is growing weak, which may delay the double-bottom breakout rally.

ADA/USDT: 1-month ChartAmong the factors that could draw buyers back into the market is the surging institutional interest in ADA. As CoinGape reported, the Cardano Foundation CEO met Franklin Templeton’s CEO, with the meeting drawing speculation about the adoption of the Cardano blockchain. If this happens, it could also bode well for Cardano price performance.

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MVRV Ratio Triggers Buy Signal

Cardano’s 30-day MVRV ratio has plunged to a level that has often signalled a potential reversal in trend from bearish to bullish. At press time, the ratio stood at -13%, indicating that the traders who bought in the last 30 days are sitting on unrealized losses of 13%.

Cardano MVRV RatioWhile such massive losses reflect a bearish outlook, previous trends show that such a deep negative in the MVRV has often marked a local bottom. In Q4 2024, Cardano price surged by more than 270%, two months after the ratio fell to -12% as seen in the chart above. In February 2025, a 67% rally ensued shortly after a similar crash.

If the MVRV marks another bottom this time around, it may validate the double-bottom chart seen in the one-month price chart.

To sum up, Cardano price has undergone a massive crash in recent weeks, with its underperformance leading to a drop in market cap ranking. However, as the MVRV flashes a buy signal, buyers could step in and aid a breakout from resistance at the neckline of a double-bottom pattern, fuelling gains past $3.

For an in-depth Cardano price forecast in 2025 and beyond – Read This.

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Frequently Asked Questions (FAQs)

1. Why has Cardano price crashed by 10% in one week?

Cardano’s 10% crash in one week is due to the bearish outlook in the broader crypto market. The drop in market cap ranking has also impacted investor confidence towards the token.

2. Can Cardano price rebound and rally to $3.10?

Cardano’s double-bottom pattern on the monthly chart suggests that a rally to $3.10 could ensue. However, ADA first needs to break above the neckline resistance.

3. What does the 30-day MVRV show about ADA price?

The 30-day MVRV shows that ADA price could recover. The ratio has fallen to a level that often marks a Cardano price bottom.

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