Key Takeaways
- Cardano’s price reversed its March downtrend and has risen by 11% in the past week.
- ADA is now challenging the 200-day EMA; a breakout could accelerate the rally toward $1.
- If ADA maintains its current strength, it could rally toward $0.94, unless sellers regain control.
Cardano’s (ADA) price has climbed by 11% over the past seven days, with its value rising from $0.62 to $0.71.
This performance marks a sharp turnaround from its trajectory throughout most of March, when ADA’s price plunged from $1.18 to $0.63.
While the recent recovery is impressive, ADA is now testing a critical resistance level. A successful breakout at this point could pave the way for a smoother rally toward the $1 mark.
But will that be the case? Let’s find out.
Cardano Flirts With Support
According to the daily chart, the Cardano price rally happened after the cryptocurrency broke out of a falling wedge. A Falling Wedge is a bullish pattern that signals a potential price breakout to the upside.
It appears when the price keeps falling, but the trendlines are closing in on one another, showing that sellers are losing strength and buyers may soon take over. As of this writing, ADA bulls have validated the uptrend as the price trades higher than the upper trendline.
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In addition, ADA’s rise to $0.71 has ensured that the price is now testing the 200-day Exponential Moving Average (EMA).
The 200 EMA is a trend-following indicator that tracks price action over the last 200 days. The trend is generally bullish when the price is above the 200 EMA, and buyers are in control.
However, if the price is below the 200 EMA, the trend is bearish, indicating that sellers are in control. As it stands, Cardano’s price is on the verge of breaking above the 200 EMA.
If successful, this could drive ADA closer to $1 in the short term.
Amid this move, the Money Flow Index (MFI), which measures buying and selling pressure, has also risen. This rise validates the thesis that bears are out of the way and bulls are in control.
ADA Price Analysis: Key Indicator Supports Rally
Concerning the short-term outlook, CCN observed that the dots of the Parabolic Stop And Reverse (SAR) indicator have positioned below the price. Typically, when the dots are above the price, the trend is bearish, with notable resistance ahead.
But since it is the other way around, it indicates ADA’s price has solid support to keep the price trading higher. The altcoin has breached the 0.618 Fibonacci level, indicating strong bullish momentum.
If ADA holds the line, the next move for the cryptocurrency could be an extended rally to $0.94.
On the contrary, a breakdown below the golden pocket ratio could see the price decline to $0.53, invalidating the bullish bias.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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