Cardano (ADA), one of the leading proof-of-stake cryptocurrencies, is flashing signs of a potential bullish breakout despite its recent downtrend. Technical patterns and on-chain metrics indicate the possibility of a strong recovery in the weeks or months ahead.

Rising MDIA: A Bullish Indicator

The Mean Dollar Invested Age (MDIA), a metric that tracks the average age of each dollar invested in a cryptocurrency, has been steadily climbing for Cardano. Data from Santiment shows the 180-day MDIA has risen to 10.68, up from -3.2 in February. Similarly, the 2-year MDIA now stands at 103, recovering from a year-to-date low of 94.

A rising MDIA suggests older and stagnant wallets are holding onto their tokens instead of circulating them in the market, a bullish sign that often precedes major price rebounds.

Cardano’s Bear Market Challenges

Cardano, like most cryptocurrencies, has faced headwinds in recent months. The coin has plunged nearly 50% from its November high, driven by a mix of profit-taking and broader market concerns, including macroeconomic fears and regulatory uncertainties.

Despite this, Cardano’s fundamentals remain strong, with its robust proof-of-stake network and growing ecosystem supporting its long-term potential.

Technical Patterns: A Tale of Two Trends

From a technical perspective, Cardano’s daily chart reveals a mix of bearish and bullish patterns:

• Bearish Pennant: ADA has formed a bearish pennant pattern, characterised by a vertical line and a symmetrical triangle. This typically signals a further price drop, with a potential decline to the $0.555 level.
• Falling Broadening Wedge: At the same time, ADA is shaping a falling broadening wedge, a bullish pattern comprising two descending and widening trendlines. Historically, this pattern often leads to significant breakouts.

The most probable scenario involves a short-term dip to $0.555, followed by a rebound targeting the psychological level of $1 and possibly retesting last year’s high of $1.32, marking a potential 90% surge from current levels.