- Cardano (ADA) price has broken above $0.40 for the first time in 200 days, suggesting a potential move towards a new yearly high.
- Technical indicators, including a bullish daily timeframe Relative Strength Index (RSI), support ADA’s upward trajectory, but a drop below $0.35 could lead to a significant decline.
Cardano’s (ADA) price trajectory has been a topic of significant interest in the crypto community, especially since its recent ascent above the $0.40 mark – a milestone it hadn’t reached in the past 200 days. This breakthrough has sparked discussions about ADA’s future potential and the possibility of achieving new yearly highs.
Cardano’s Bullish Momentum
The ADA price has demonstrated a robust performance since October 19, leading to its recent peak. Despite a slight pullback, it maintains its position above the critical $0.35 support area, raising questions about its next move. The ADA price’s movement within a defined range between $0.25 and $0.40 since November 2022 further underscores its potential for growth.
A key factor in ADA’s favor is the buying pressure indicated by the formation of a long lower wick in June, which led to the asset reclaiming its position within the $0.25 to $0.40 trading range. The recent price action that saw ADA creating a higher low within this range, followed by a rapid increase in value, has culminated in touching a high of $0.41 this week.
Technical Analysis and Market Sentiment
The Relative Strength Index (RSI) on the weekly chart is a crucial indicator for ADA’s bullish momentum. Currently, the RSI is above 50 and rising, signaling a positive trend. This momentum is supported by the daily timeframe, where ADA has broken out from a descending resistance trend line and reclaimed the $0.35 horizontal resistance area.
Additionally, the presence of a hidden bullish divergence on the RSI supports the potential for continued upward movement. If ADA maintains its momentum and stays above the $0.35 support area, it could target the next resistance at $0.45, which is in proximity to the yearly high.
Evaluating Risks and Opportunities
While the overall sentiment remains bullish, ADA is not without its challenges. The formation of a bearish candlestick with a long upper wick indicates a potential for short-term pullbacks. However, as long as ADA does not close below the $0.35 area, the bullish trend is likely to persist.
In the event of a price bounce at the $0.35 support level, ADA could witness a 20% increase towards the next resistance. Conversely, a close below this level could trigger a 20% drop to the next support at $0.30.
The ongoing developments in the Cardano ecosystem, including the successful “Battle of the Builders” at the Cardano Summit and community-driven initiatives, add to the optimistic outlook for ADA. As the market continues to evolve, ADA’s recent performance and technical indicators offer a promising glimpse into its potential trajectory in the near term.