Cardano (ADA) Price Rebounded Strongly As The Summit Approached, Here’s A Potential Target
The price of Cardano (ADA) has formed a bullish pattern after bouncing from the long-term support zone. Breaking above the nearest horizontal resistance level could trigger a strong uptrend.
The Cardano summit conference is scheduled for November 2-5. This could attract investors’ attention to ADA.
Bullish Pattern
The ADA price bounced from the long-term support zone at $0.24 during the week of October 16 to 22 (green arrow) and formed a bullish engulfing candle last week. This move is significant as it indicates that the market has established a floor for ADA at $0.24. Additionally, it confirms the formation of a triple bottom pattern compared to the lows created in early June and early January 2023.
The triple bottom pattern is a bullish pattern, typically appearing at the end of a downtrend. It is more meaningful when it appears on the weekly timeframe.
The weekly RSI (Relative Strength Index) has created a significant bullish divergence and is currently rising above the 50 level. Both are bullish signals, supporting further recovery.
Therefore, the ADA price is likely to continue rising to the next horizontal resistance level at $0.38, corresponding to a 26% increase from the current price level.
Daily Outlook
The daily chart shows that the ADA price broke above the mid-term trading range from $0.24 to $0.273 on October 23 with a large bullish candle. This is a bullish signal indicating that bulls have controlled the short-term price action.
Indeed, the price has continued to rise since the breakout and is now approaching the crucial horizontal resistance zone at $0.3, which has been both support and resistance since June 2023 (red arrows). Breaking above this zone could accelerate ADA’s uptrend.
However, technical indicators suggest that the ADA price could face rejection and undergo a correction afterward.
This is for two reasons:
- The daily RSI has moved deep into the overbought zone, indicating that the uptrend has been excessive in the short term.
- Volume has been decreasing over the past few days, indicating weak buying pressure at higher levels.
Therefore, the ADA price is likely to correct towards the previous range’s resistance at $0.27 before continuing its uptrend.
Conclusion
The most likely scenario suggests that the ADA price could rise to $0.38 in the near future. However, it might correct towards $0.27 before continuing its uptrend.
The short-term bearish outlook would be invalidated if the ADA price breaks and closes the daily candle above $0.3.
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.
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