- Cardano achieves its highest weekly close since May 2021, signaling potential long-term bullish cycle.
- Despite bullish indicators, caution advised due to bearish divergence on weekly RSI.
Cardano (ADA) has been on a notable upward trajectory since September 2023, capturing the attention of cryptocurrency investors and analysts alike. The culmination of this rise was marked by a significant milestone in December when ADA reached a new yearly high of $0.68.
This rally was not just a short-term surge but a movement that positioned ADA for its highest weekly close since May 2021, signaling a potential long-term bullish cycle for the digital currency.
Despite the optimistic trend, ADA faced challenges in surpassing the $0.58 horizontal resistance area. The presence of six consecutive long upper wicks indicated substantial selling pressure at this level, casting doubts on the sustainability of the upward movement.
However, ADA’s resilience was evident as it eventually secured a weekly close above this critical resistance area, setting a new benchmark for its performance since May 2022.
The Bearish and Bullish Indicators: A Tale of Two Timeframes
The weekly Relative Strength Index (RSI), a momentum indicator crucial for evaluating market conditions, presents a contrasting view. Despite ADA’s price achievements, the RSI has exhibited bearish divergence, often a precursor to potential downward movements. This divergence suggests that caution is warranted, even in the face of recent price gains.
Conversely, the daily timeframe paints a more bullish picture, buoyed by positive price action, wave count, and RSI readings. ADA’s ability to break out from a descending resistance trend line and reclaim the $0.58 resistance area is a testament to its growing strength.
An RSI movement above 50 further legitimizes the bullish sentiment surrounding ADA’s market behavior. To explore more thoroughly the bullish potential for Cardano, you can watch this YouTube video.
Community Sentiment and Market Predictions
The cryptocurrency community’s response to ADA’s performance has been overwhelmingly positive. Zach Humphries’s decision to accumulate ADA over several years, along with a poll by WhaleFUD suggesting that 48% of respondents believe ADA could surpass Ethereum in market capitalization, underscores the optimistic outlook for Cardano.
Furthermore, Cardano’s founder, Charles Hoskinson, engaged with the community through a surprise AMA, fueling excitement and speculation about ADA’s future.
Technical analysis, supported by the Elliott Wave theory, indicates that ADA is in the fifth and final wave of its upward movement. This analysis suggests a potential top of the increase at $0.83, representing a 40% gain from the current price level.
However, investors are cautioned that a close below $0.58 could trigger a significant drop to the $0.50 support level, highlighting the volatile nature of the cryptocurrency market.
At the time of writing, the price of ADA had fallen 0.64% in the last 24 hours, fell to price of $0.5959. But, this represents an increase of 3.33% over the past 7 days.