The price of Cardano has remained in a narrow range for most of the month. In the last 24 hours, the price has risen by about 0.5%, but over the week, there is a decline of about 1.6%. Cardano is still trying to resist a broader downturn.

The charts show a classic descending formation, but based on blockchain data and capital movements, the realization of the decline is not yet fully confirmed. This tension determines the current state of ADA's price.

Head and Shoulders - pattern creates a threat

In the daily chart, Cardano is approaching the confirmation of the head-and-shoulders pattern. The neckline, which connects the swing lows, slopes downward. This means that buyers are still defending the price at lower levels.

A downward-sloping neckline generally reinforces the bears' view, as it shows demand weakening even before a confirmed breakout. If it closes clearly below this neckline, the pattern would strengthen and trigger a movement of about 18%, targeting $0.24. This presents a potential downside risk.

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Currently, ADA has not fully followed the downward pattern. The price has remained in sideways movement, still allowing for a breakout from the pattern.

One indicator is down nearly 60 percent, referring to a decrease in selling pressure

An important blockchain metric supports the decline. The spent coins age band, which measures token movement and potential selling pressure, has sharply decreased. The reading dropped from about 241.71 million ADA coins (December 11) to the current 105.51 million. This is nearly a 60% reduction in circulating coins.

A smaller amount of spent coins indicates that fewer holders are rushing to sell. Previous declines in this metric have coincided with short-term recoveries. For example, after the decline on November 29, ADA recovered about 2.6%. Notably, on December 5, the activity was at its lowest, and the price rose from $0.41 to $0.47 by December 9, which is about 15%.

The current decline does not automatically mean the same reaction. It does, however, indicate an environment that has previously supported recoveries.

Large amounts of money and Cardano price levels determine the next phase

The last significant observation is found again in the chart. The Chaikin Money Flow (CMF), which measures capital flows, has been on a downward trend at the same time as the price of Cardano rose from December 18 to 23. This is a bearish divergence, as capital flows weaken during attempts to recover.

Now, however, the CMF is near the upper boundary of the downward trendline. If the CMF breaks upward and the price stays above $0.35, the entire head-and-shoulders pattern could lose significance. If ADA exceeds $0.38, that would represent a 6.5% increase and a sign that buyers are pressuring the markets. One CMF breakout may not be enough yet.

The indicator may need to rise above the zero line, at which point cumulative investments would grow.

Above that level, at $0.48, the downward scenario loses significance. Reaching this level is not a prediction, but a point where the descending pattern would be invalidated.

If ADA closes below $0.29, the downtrend would be confirmed as the baseline scenario and $0.24 would rise as the next support level. Currently, Cardano is trying to fight against the downward pattern with reduced coin activity and possibly increasing capital flows. If the CMF rises and the price stays above $0.35 or even $0.33, hope remains.

If this doesn't happen, Cardano's price chart has already indicated the direction.