Cardano price consolidates above the key support level of $0.50, showing technical signals

According to CryptoPotato, Cardano (ADA) price started fluctuating in the consolidation area around $0.50 on Tuesday, which is a key support level between two 60-day trend lines. As a competitor to Ethereum and a blue-chip cryptocurrency, ADA tokens are releasing some interesting market signals, including a descending wedge pattern and a surge in trading volume.

Furthermore, despite testing the downside resistance in January, Cardano's price has remained above $0.50 and the number of ADA holders experiencing losses has significantly recovered. Since rising from $0.38 to $0.67 in the first week of December, Cardano's price has been holding above the $0.50 support level. However, it faced two sharp tests from bearish directions on January 7th and January 25th respectively.

Meanwhile, after multiple tests of the downside resistance at $0.62 in the last week of December followed by testing at $0.58 in the first week of January and then at $0.53 towards the end of January; there seems to be a convergence forming between support line and downward resistance line creating a descending wedge pattern in Cardano's price movement chart. Typically seen as bullish signal turning into an indication for reversal into bullish trend channel but could also face continued resistance breaking below support entering bearish trend.

According to CoinGlass data, ADA token trading volume surged by 54% within 24 hours on Wednesday indicating that markets are adjusting positions based on bullish or bearish predictions with total sales close to nearly USD 1 billion across spot and derivative markets accounting for almost 6% of total market capitalization for digital smart contract tokens.

Santiment data shows that Cardano's price-to-realized value (MVRV) ratio over the past 30 days recently recovered from -17% to -3%. This implies that almost all ADA token holders are currently profitable.