Cardano's Market Dynamics Show Diverging Signals as Profit Metrics Climb
ADA price retraces 1% after two-day rally,monero price testing the upper boundary of a descending channel pattern.
Network data reveals 15% monthly increase in profitable ADA holdings, totaling 2.34 billion additional tokens.
Technical indicators present conflicting signals, with MACD showing bullish momentum while RSI struggles at midline.
Friday's trading session saw Cardano's native token ADA retreat approximately 1% from weekly highs, temporarily pausing its attempt to break out from a multi-week descending channel. This consolidation occurs alongside noteworthy on-chain developments, with Santiment metrics indicating a substantial expansion of profitable ADA holdings throughout July.
Profit Metrics Paint Bullish Picture
Blockchain analytics reveal the Cardano network currently holds 18.23 billion ADA in profitable positions, marking a significant 2.34 billion ADA increase since Tuesday's 15.89 billion figure. This metric, which tracks tokens last transacted below current market prices, suggests growing positive sentiment among holders. Market observers note such expansions in profitable supply often precede increased network activity, though they may also indicate potential profit-taking pressure at key resistance levels.
Technical Crossroads: Channel Breakout or Retest?
ADA's price action currently tests critical technical boundaries, with Thursday's high of $0.6119 demonstrating notable selling pressure before closing at $0.5992. The cryptocurrency remains contained within a descending channel formed by connecting swing highs from May 23 and June 10, with parallel support established from May 19 and June 5 lows. A confirmed daily close above this channel's resistance could signal trend reversal, potentially targeting the $0.71 level last seen in mid-May.
Momentum indicators present mixed signals. The MACD histogram shows strengthening bullish divergence with expanding green bars, though both MACD and signal lines remain in negative territory. Meanwhile, the RSI's retreat from the 50 level suggests ongoing struggle for directional control. Should ADA fail to maintain support at Thursday's open of $0.5840, analysts anticipate potential retest of the $0.5419 support zone established during June's market downturn.
Market participants continue monitoring these technical developments alongside network fundamentals, particularly the growing profitable supply metric which may influence near-term price action. The coming sessions will prove crucial in determining whether ADA can convert its technical setup into sustainable upside momentum.
