Cardano (ADA) could be on the brink of a significant price surge, with projections suggesting gains exceeding 130% in the upcoming weeks.
Analysts have noted that Cardano is currently exhibiting a classic “ABCDE” triangle pattern, a consolidation structure typically observed prior to substantial breakouts. This pattern involves the price fluctuating in five distinct waves, labeled A through E, and generally concludes with a notable movement in one direction.
Currently, ADA is positioned in the C wave, which has seen a downward trend. Once the D and E waves are completed, experts predict a powerful upward breakout. Analysts suggest that a rebound from the 0.5–0.618 Fibonacci retracement zone could set the stage for a rally towards $1.50.
Recent analysis indicates that ADA has been respecting its long-term trend, operating near the lower boundary of a symmetrical triangle pattern. Should ADA break above this crucial convergence zone, minimal resistance awaits until the $1.90 mark, which could trigger rapid buying activity.
Data reveals that investor sentiment remains strong, with net accumulation observed over recent weeks. More tokens have been removed from exchanges than deposited, indicating robust investor confidence in ADA’s long-term outlook.
Another analyst has drawn parallels between ADA’s current price activity and its performance in August–September 2024, highlighting a prior rally after an extended consolidation phase. The absence of new lows following its dip to $0.49 on February 3 fuels speculation of a potential breakout in May, with targets reaching as high as $2.50.
As of writing, ADA was experiencing bearish pressure, trading at $0.64, reflecting a decline of 6.2% over the past day, with a market capitalization of $23.3 billion.
Technical Analysis of ADA
On ADA’s daily price chart, the 50-day moving average is currently above the 200-day moving average, indicating sustained bullish momentum. This setup reinforces the possibility of an impending breakout.
The Supertrend indicator has shifted below the price level and turned green, suggesting a potential trend reversal may occur soon.
Furthermore, the Relative Strength Index (RSI) has dipped to a level that indicates oversold conditions may be approaching, potentially inviting bullish activity. The MVRV Z-score has also fallen to 0.0077, its lowest since early March, indicating that average holders are nearing breakeven. This often signifies reduced selling pressure and the beginning of accumulation, potentially leading to a price recovery as market sentiment shifts.
At present, ADA maintains a strong correlation with Bitcoin, with a correlation coefficient of 0.79 over the past 30 days. Consequently, ADA’s next price movement is likely to be influenced by Bitcoin’s performance, especially as it navigates a downtrend amidst recent developments.
Bitcoin (BTC) is currently trading at $81,484, down approximately 7% over the past week.
