Cardano’s ADA token has defied the recent market slump with a three-day price surge, currently trading around $0.384. This bullish momentum coincides with Bitcoin’s rebound from $55,000 and easing pressure from German government sell-offs. But could this be the start of a more significant upswing for ADA?
Technical analysts like World Of Charts are pointing towards a potential breakout for ADA. A key indicator is the “falling wedge” pattern on ADA’s chart, formed by converging downward trendlines. This pattern typically suggests waning selling pressure as the price movement tightens within a narrowing range. Over the past few months, ADA has been trapped within this wedge, dropping from $0.81 to as low as $0.357. However, a breakout from this pattern could signal a significant price increase.
Will History Repeats Itself? Chang Hard Fork Fuels Optimism
Cardano’s upcoming Chang Hard Fork, a crucial step towards decentralized governance, is further fueling the bullish sentiment. Historically, major network upgrades have impacted ADA’s price positively. For instance, the Alonzo hard fork in September 2021 triggered a staggering 130% surge, propelling the price from $1.35 to $3.10 in just a month. Investors are hoping for a similar price movement with the Chang Hard Fork.
Bullish Indicators Pointing Upward
Beyond the historical trends, several technical indicators suggest a potential ADA breakout. The recent price surge coincided with a bullish divergence on the Relative Strength Index (RSI). This means, despite a lower low in price, the RSI indicator registered a higher high, potentially signaling a trend reversal or a short-term rally.
Also Read: Cardano (ADA) Price Pump Incoming? Analyst Predicts 1780% Surge Based On Elliott Wave Pattern
Breakout Targets and Potential Risks
A successful breakout above the falling wedge pattern’s upper trendline could push ADA towards $0.426, a 10% increase, and potentially retest its daily resistance level. Further bullish momentum could see ADA revisit its 50% price retracement level of $0.564.
However, a daily close below $0.317, a lower low, could indicate a shift towards bearish sentiment. This scenario might lead to a 10% price drop and revisit the previous low of $0.283 seen in November 2023.
Cardano’s future remains uncertain, but the recent price surge and technical indicators paint a cautiously optimistic picture. With the Chang Hard Fork approaching, the next few weeks could be crucial in determining ADA’s price trajectory.
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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