Cardano (ADA) has marked the end of a long-term downtrend and is very close to confirming a reversal to an uptrend. Milkomeda co-founder, Sebastien Guillemot, stated that Cardano is making significant strides to become the largest EVM chain in the cryptocurrency industry.
Potential breakout
The Cardano (ADA) price has dropped below the gradually descending resistance line since reaching an all-time high of $3.1 in September 2021. During this period, it reached its lowest level of $0.24 at the end of December 2022 before starting the current uptrend.
This uptrend has helped the price break above the resistance line and retest the horizontal resistance level of $0.43. Although rejected, ADA has successfully flipped the resistance line into support in the week of March 6 to 13 (blue arrow). This move has also helped ADA create a first higher low, marking the end of the downtrend.
However, for the trend to be considered bullish, the ADA price needs to break above the horizontal resistance level of $0.43. If successful, the price may rise to the next resistance level at $0.56.
Currently, the token is in the process of creating the third consecutive bullish candlestick and is trading near the resistance level. This indicates strong buying pressure at lower levels.
The RSI indicator has completed a bullish Failure Swing pattern by moving up above the high level between divergences and is sloping upwards, supporting the possibility of a breakout for ADA.
Short-term outlook
After rebounding from the 0.618 Fibonacci retracement support of the previous uptrend, ADA has formed a bullish structure with strong bullish candlesticks and high trading volume. This is often a sign of a new uptrend.
This uptrend has also helped the price break above the important resistance level of $0.35 and confirmed it as support on March 28.
The RSI indicator has broken the descending divergence line and is above 50. Such breakouts often occur before price action breakouts.
Therefore, there is a likelihood that the ADA price will break above the resistance level of $0.43 in the coming days.
Conclusion
The most likely prospect indicates that the ADA price will break above the resistance level of $0.43.
If successful, it may quickly rise to the next resistance level at $0.56.
Breaking and closing below the $0.35 level will invalidate this possibility.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
Read more:
- Chainlink (LINK) Shows Bullish Signal, $8.4 Is At Hand
- Bitcoin Dominance (BTC.D) Appears Bearish Signal, Is Mini Altcoin Season Coming?