Cardano (ADA) Shows Bullish Signal, Here Is The Next Target
Cardano (ADA) has marked the end of a long-term downtrend but has not yet confirmed a reversal to an uptrend.
Djed, an algorithmic stablecoin on the Cardano blockchain, is looking to expand to Ethereum and BNB Chain. This will increase liquidity for the stablecoin and help strengthen Cardano’s DeFi ecosystem.
Important Level
Cardano (ADA) price has fallen below a descending resistance line since reaching an all-time high of $3.1 in September 2022. During this period, it reached a low of $0.24 in late December before beginning 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 during the week of March 6-13 (green arrow). This is a bullish signal, indicating that the downtrend has ended.
However, for the trend to be considered bullish, ADA price needs to break above the horizontal resistance level of $0.43. If successful, the price could rise to the next resistance level at $0.56.
The RSI indicator has completed a bullish Failure Swing pattern by moving above the high between the divergences and is trending up, supporting the possibility of a breakout for ADA.
Descending wedge pattern
Besides the bullish outlook from the weekly timeframe, ADA price has also broken above the descending wedge pattern and confirmed it as support on March 12th.
This technical pattern has a target of $0.56, calculated by measuring the height of the pattern and adding it to the breakout point. As it has been formed for over 8 months, the post-breakout movement can be very strong.
If so, moving towards the pattern target will help ADA break above the long-term resistance level at $0.43 and confirm the uptrend.
The daily RSI indicator supports the potential for continued growth as it breaks above the descending divergence line and is above 50.
This view will be invalidated if the price breaks below $0.3. After that, ADA may retest the yearly low of $0.24.
Conclusion
The most likely prospect is that ADA will continue to rise in the future. The nearest target on the upside is $0.43 and higher to $0.56.
This view will be invalidated if the price breaks below $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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