Cardano enters February 2026 in a complex technical position, attempting to consolidate the 5.48% gains achieved during a relatively stable January. According to analyst Ananda Banerjee, the cryptocurrency faces the challenge of overcoming its negative historical median of -9.50% for this month, relying on a technical setup that suggests significant bullish potential.
Although momentum appears to be fading following a 4% weekly drop, the market structure reveals signs of silent accumulation taking place. Thus, the Cardano price is currently compressed within a falling wedge, a pattern that typically precedes explosive moves when selling pressure finally begins to exhaust itself definitively.
The bullish divergence between price action and the Relative Strength Index (RSI) reinforces the possibility of an imminent trend reversal. However, for this scenario to materialize, the asset must break the wedge’s upper trendline, which would activate technical projections pointing toward a substantial 90% increase.
CMF divergence and institutional interest behind the accumulation phase
Throughout January, the Chaikin Money Flow (CMF) indicator showed steady improvement, suggesting that large investors are taking advantage of the weak Cardano price. While capital inflows are lower than those recorded in previous cycles, this cryptocurrency shows signs of a rotation of hands toward holders with much stronger market conviction.
This accumulation dynamic occurs while the spot market shows modest flows, explaining the lack of an immediate acceleration in the current valuation. Nevertheless, the increased participation of “smart money” could be the necessary catalyst for the asset to ignore its negative February seasonality, transforming the current structure into a new growth cycle.
Which key levels will determine the success of the bullish breakout in February?
Furthermore, the existence of heavy short-position pressure in the derivatives market acts as potential fuel for a massive short squeeze. If the Cardano price manages to surpass $0.374 and $0.437, sellers would be forced to buy back, driving the value toward the decisive resistance at the $0.543 level.
Ultimately, the success of this technical configuration depends on maintaining the critical support at $0.329 to avoid invalidating the pattern. If a confirmed breakout is achieved, investors could witness a massive rally toward new targets, finally defying the historical data that usually overshadows the asset’s performance during the second month of the year.
