Cardano (ADA), the native token of the Cardano blockchain, has been on a downtrend in recent months, mirroring the broader cryptocurrency market decline. However, a prominent analyst, Ray Trader, believes ADA is nearing a reversal and has identified a potential entry point for investors.
Trader’s analysis leverages the Elliott Wave theory, a technical analysis framework that postulates price movements occur in five distinct waves. According to Trader, the first wave concluded in March 2024 when ADA reached its yearly high of $0.8104. The ongoing correction constitutes the second wave, with a potential endpoint on the horizon.
This perspective aligns with Santiment’s Market Value to Realized Value (MVRV) ratio for ADA, which suggests the token might be undervalued. When the MVRV falls below 1, it typically indicates an oversold condition and a possible buying opportunity.
Trader anticipates Wave 3 to trigger a significant upswing, potentially propelling ADA to $7 by 2025. This projected surge represents a more than 1,700% increase from ADA’s current price of $0.3928. Furthermore, Trader envisions a possible price correction in Wave 4 before another rally that could take ADA as high as $9.
Interestingly, Trader highlights a potential entry point for investors seeking to capitalize on the predicted Wave 3 rally. He emphasizes the 78.60 Fibonacci retracement level at $0.3429, suggesting this level presents a good buying opportunity.
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On-chain data from IntoTheBlock indicates that Cardano bulls have been accumulating ADA tokens over the past week. This buying pressure, coupled with a potential technical breakout, could propel ADA towards a much-needed rebound.
It’s important to remember that technical analysis, while offering valuable insights, cannot predict the future with complete certainty. Market sentiment and unforeseen events can significantly impact price movements.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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