Here’s Why Cardano (ADA) Could Gain 36% More
Cardano (ADA) has marked the end of a long-term downtrend and is currently confirming a reversal to an uptrend. Recently, Cardano’s development laboratory, IOG, has released Lace – their first native wallet for the Cardano network.
Weekly outlook
The price of Cardano (ADA) has been trading below the 20-week moving average since breaking down below it on November 15, 2021. During this time, it reached a low of $0.24 in late December 2022 before beginning its current upswing.
This upswing has helped the price break above the 20-week moving average and retest the horizontal resistance zone around $0.42. Although it was rejected, ADA successfully flipped this moving average into support after making a false breakdown in the week of March 6-13 (red circle). This action has also helped ADA create a higher low, marking the end of the downtrend.
Currently, it is in the process of breaking above the resistance zone at $0.42. If successful, it will confirm that the trend has reversed to an uptrend. The next target is $0.6, marking a 36% increase from the current price.
The weekly RSI indicator supports the possibility of a breakout by creating a bullish structure and being above 50.
Inverse head and shoulders pattern
The daily chart shows that ADA has completed an inverse head and shoulders pattern with a bullish engulfing candlestick on April 13. This breakout is supported by high trading volume, making it valid.
This pattern has a target of $0.6, found by measuring the height of the pattern and adding it to the breakout point.
As the pattern target coincides with the long-term resistance zone at $0.6, the ADA price is likely to reach this level before any significant corrections occur.
Conclusion
The most likely prospect is that the ADA price will continue to rise to $0.6. This outlook will be invalidated if the price creates a false breakout above the resistance zone at $0.42.
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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