Cardano (ADA) has struggled to recover despite a strong performance during Bitcoin’s recent rally. While ADA surged by 46% as Bitcoin moved from $76,000 to $111,600 between April and mid-May 2025, this momentum was short-lived. Rather than establishing new highs, Cardano merely returned to price levels seen over the last six months. Since then, its price trend has reversed, and current signals suggest a recovery may not happen any time soon.

Key indicators reveal that investor sentiment toward Cardano remains cautious. On-chain metrics from Santiment show that although daily active addresses have held steady, the blockchain’s development activity has declined since February. For long-term holders, this is a concerning trend, as it points to less innovation and a slower-growing ecosystem. Developer activity is often seen as a leading indicator of future protocol strength and adoption.

Another major concern is Cardano’s MVRV ratio, which has remained positive for almost two months. This suggests that many investors who entered the market within the past 90 days are still in profit. When the MVRV ratio is high, especially after a short-term price rise like ADA’s rally from $0.57 to $0.80, it often means that holders may look to sell to realize gains. This creates additional selling pressure, particularly when the market lacks strong new demand. The number of holders in profit has also begun to decline, meaning that more investors are either at break-even or experiencing losses. As a result, even modest recovery attempts from ADA are likely to be met with selling, as investors exit their positions to protect profits or minimize losses.

The mean coin age metric also supports a bearish view. This indicator, which tracks how long tokens have remained in wallets without moving, has been declining steadily. A falling mean coin age reflects increased selling and reduced long-term holding. It indicates that users are actively distributing their ADA, rather than holding in anticipation of future gains. For any sustainable recovery, this trend needs to reverse, and investor confidence needs to improve.

From a technical analysis standpoint, Cardano’s daily chart presents further evidence of weakness. On May 30, the market structure turned bearish when ADA fell below the $0.71 support level, a price it had previously maintained. This breakdown opened the door to a deeper decline, with the next major support located at $0.51. If Cardano drops below this level and then retests it as resistance, traders may see a new short-selling opportunity targeting the $0.427 range.

Despite the possibility of a short-term price range developing, such a formation is not in itself a reliable sign of recovery. For any meaningful bounce to take hold, this range must be supported by rising demand and positive shifts in key on-chain metrics like mean coin age and developer activity. Without such support, the market may simply be pausing before the next leg down.

There are several major obstacles standing in the way of a Cardano recovery. First, declining developer engagement poses a serious issue. Without ongoing upgrades and new platform introduces, investor enthusiasm could wane. Second, the heavy selling pressure from profit-takers adds to the difficulty of regaining momentum. As soon as prices inch up, these holders are likely to sell, limiting the upside. Third, falling network retention, as seen in the declining mean coin age, shows that users are not confident enough to hold their ADA for the long term.

For Cardano to bounce back, several things need to happen. Developer activity must pick up, bringing new features and energy into the ecosystem. Long-term holders must regain confidence, as reflected by an upward trend in mean coin age. The network also needs more users and more transactions to show growing adoption. Finally, ADA must hold above its current support levels to prevent a steeper decline.

In conclusion, while Cardano showed strength during Bitcoin’s rally earlier this year, the underlying data points to a network under pressure. Until we see clearer signs of recovery in user behavior, developer engagement, and market structure, ADA’s near-term outlook remains bearish. Investors should stay cautious and look for stronger confirmation before expecting a significant rebound.