As Bitcoin reclaims the impressive $55,000 mark, the altcoin market is showing signs of life. This week, Cardano (ADA) is attracting significant attention as it prepares for a potential breakout. After a mild positive weekend that alleviated last week’s bearish pressure, could Cardano’s rebound lead it to recapture the $0.40 level?
Cardano’s Resilient Foundation At $0.312
Cardano’s daily price chart unveils a crucial falling wedge pattern, with ADA finding solid support at the $0.312 mark. This support level has been tested multiple times, with Cardano successfully avoiding a close below $0.312. This resilience is highlighted by the repeated rejection of lower prices.
In recent trading, Cardano has experienced a notable uptick, rising 3.49% and 3.99% over two days. Currently priced at $0.341, ADA has shown an intraday gain of 1.37%. However, the intraday candle’s higher price rejection—falling from a 24-hour high of $0.349—has pushed Cardano below the 20-day Exponential Moving Average (EMA), which now serves as a dynamic resistance.
Despite this, a bullish divergence noted in the daily Relative Strength Index (RSI) from the $0.312 double bottom suggests that a bullish reversal may be on the horizon. If Cardano can overcome the resistance trend line, a rise to $0.375—offering a potential upside of 10%—is within reach.
Surge in Network Activity Sparks Optimism
Cardano has recently seen a surge in daily active addresses, reaching a six-month high. On September 6, ADA recorded 39,451 daily active addresses, the highest figure since March 2024. Historical data suggests that such spikes in network activity often precede significant price increases.
With Bitcoin and the broader cryptocurrency market poised for a potential rebound, this uptick in Cardano’s network activity could signal a strong recovery for ADA in the coming weeks.
4-Hour Chart Reinforces Bullish Sentiment
The 4-hour chart for Cardano supports the bullish narrative, showing a recovery phase that aligns with a broader positive trend. After a double bottom reversal at $0.313, ADA is undergoing a rounding bottom reversal. The recent price action has surpassed the 23.60% Fibonacci retracement level and is now challenging the 38.20% level at $0.346.
The 4-hour chart reveals that Cardano has moved beyond both the 20 EMA and the 50 EMA, though it faces resistance from the 200-day EMA. The increasing 20-day EMA suggests a potential bullish crossover. Additionally, the Directional Movement Index (DMI) indicates a positive trend with an increasing +DI line and an uptick in the Average Directional Index (ADX) line, pointing to growing bullish momentum.
Should this uptrend persist, Cardano’s price might reach the 61.80% Fibonacci level at $0.366 or even the 100% level at $0.399. Optimistically, the 1-day chart indicates that the upside potential could extend to $0.422, aligning with both the 200-day EMA and the 23.60% Fibonacci level.
With Bitcoin’s resurgence and Cardano’s robust network activity, ADA appears poised for a significant rebound. If Cardano can clear the current resistance levels, a move towards $0.40 and beyond could be on the horizon. As the altcoin market gains momentum, Cardano’s ongoing recovery could set the stage for a breakout run in the weeks ahead.
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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