Cardano has shown resilience in recent weeks, trading around $0.88 after recovering from earlier pullbacks. The price action has been supported by the convergence of major moving averages, with the 50-day EMA trending above the 100-day EMA and both comfortably sitting above the 200-day EMA. This alignment suggests medium-term bullishness, as ADA has managed to climb out of its mid-summer correction. However, a closer look at bubble risk metrics signal caution.
The Short-Term Bubble Risk (STBR) indicator, which compares ADA’s price against the 20-week simple moving average (SMA), currently sits at 1.18. According to the framework, values between 1 and 1.25 represent “business as usual,” meaning the price is elevated but not yet in an overheated state. Historically, ADA has entered dangerous territory when the STBR climbs beyond 1.50, with values above 2 often marking speculative tops and subsequent sharp corrections.
Looking at ADA’s history, prior peaks during the 2017 and early 2021 bull markets pushed this metric above 2.0, signaling bubble-like conditions that preceded major declines. At today’s levels, ADA remains well below those extremes, but the pattern is worth monitoring. If buying pressure continues to lift ADA closer to the $1.00 resistance zone, the STBR could quickly move into “heating up” range (1.25-1.50), suggesting that risk is building.
Volume data also reflects this cautious outlook. While there has been a steady recovery in trading activity, it is not showing the kind of explosive surges typical of sustainable trend reversals. Instead, the recovery looks gradual, leaving room for both upside continuation and a potential reversal if momentum fades.
In the near term, ADA holders should focus on whether the price can break above $0.95 and then sustain above $1.00. Failure to do so could invite another correction, especially if broader market sentiment turns risk-off. Conversely, breaking and holding above these levels could attract further capital inflows.
Cardano is not in bubble territory yet, but the risk metrics suggest that if momentum accelerates too quickly, the asset could find itself in overheated conditions. Investors should monitor STBR closely alongside price action to gauge whether ADA’s recovery is sustainable or at risk of turning speculative.
