The Cardano price has bounced up again, but the result is as usual. Since January 20, ADA has increased by about 7%, reaching briefly upward before stopping around 0.35 USD. There was no breakout. It was yet another bounce that did not lead to any real rise.

Three things explain why the Cardano price continues to bounce but never breaks through, and why the same pattern remains.

Reason 1: A weak hidden positive divergence initiated the rise.

The latest bounce occurred due to a hidden positive divergence on the 12-hour chart. Between the end of December and January 20, the ADA price made a higher low while the RSI showed a much weaker lower low.

That detail matters. A weaker lower bottom on the RSI shows that the selling pressure was a bit weaker, not that buyers took control. This type of divergence often leads to short rises, not strong rallies.

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Exactly that happened. The price of Cardano bounced about 7% to 0.37 USD on January 21, but the movement quickly stalled.

The timing explains why. On January 21, when the price approached 0.37 USD, Cardano's development activity peaked at nearly 6.94, the highest level in about a month.

Development activity shows how much work is ongoing on the chain and tends to strengthen price confidence. In mid-January, ADA's local price peak closely followed a local peak in development activity.

The support from development did not hold. Development activity decreased, and the price followed. Now the level has risen to around 6.85 but the month's high has not been surpassed. The divergence stopped the decline but did not create enough demand for a higher price as development stalled.

Cause 2: Profit withdrawals increase every time the price of Cardano rises

The larger problem concerns what happens after Cardano starts to rise.

Spent coins age band shows how many coins of different ages are being moved. High values often indicate selling and profit-taking. Over the past month, each bounce has been followed by a strong increase in coin activity.

At the end of December, the price of Cardano rose by about 12%, while coin activity increased by more than 80%, indicating that many sold during the rise. In mid-January, ADA rose about 10%, and spending activity increased nearly 100%, also a sign that holders sold when it went up.

The same pattern is repeating now. Since January 24, coin activity has increased by more than 11% from 105 million to 117 million, even though the ADA price has not broken higher. This shows that sellers are preparing for the next bounce instead of waiting for confirmation.

Therefore, every movement loses momentum. Every attempt at a rally meets profit-taking faster than before.

Reason 3: Whales are reducing their exposure, they are not absorbing the selling pressure

In normal cases, large actors, “whales”, help to absorb selling pressure. Now they do not.

Wallets holding between 10 million and 100 million ADA have reduced their balance from about 13.64 billion ADA to approximately 13.62 billion ADA, a decrease of around 20 million ADA since January 21. From January 22, wallets holding between 1 million and 10 million ADA have dropped from about 5.61 billion ADA to roughly 5.60 billion ADA, a decrease of nearly 10 million ADA.

It is not about panic selling, but there are clear net reductions. Since there is a lack of interest from large actors, there is nothing to absorb the profit-taking. Thus, the price becomes more susceptible to decline when it occurs.

Derivatives data clearly shows this weakness. Over the next seven days, short liquidations are around 107.6 million USD, while long liquidations are about 70.1 million USD. Short positions are over 50% more than long, indicating that traders believe that rises do not hold but quickly reverse.

This imbalance shows that the market expects new selling pressure quickly if Cardano tries to bounce back again, especially near resistance levels.

Cardano price levels that determine what happens next

The price structure now shows the situation more clearly.

Upwards, 0.37 USD is the first important level. A clear break and steady price above that would trigger short liquidations and provide temporary relief. But 0.39 USD is much more important. If the price goes above this zone, almost all remaining short positions would be liquidated, which would lead to a clear trend shift. Above that is 0.42 USD, the level where the bigger picture could become positive again.

Downwards, 0.34 USD is the most important support. If the price loses this level, many long positions risk being liquidated, which could lead to increased downward pressure as leverage disappears.

For Cardano to get out of this cycle, three things need to happen. Development activity needs to recover and remain at recent high levels. Activity where coins are spent must decrease instead of increasing during small rises. And whales need to come back as net buyers.

Until then, Cardano's price rises are vulnerable.