Key Takeaways
- Cardano’s price has retested $0.80 after breaking out of a descending channel, with the MFI and AO climbing.
- A liquidity concentration near $1.10 suggests potential resistance but hints at the possibility of ADA breaking past $1.
- In a bearish scenario, ADA’s price could fall toward $0.66, near the 0.786 Fibonacci level, if selling pressure rises.
Cardano’s (ADA) price has risen 10% in the last seven days and has hit its highest level since March 9. As a result of this move, ADA has retested $0.80, which once served as psychological support when the altcoin surged past $1 earlier in the year.
This recent increase aligns with the broader market recovery, with signs emerging that the altcoin season could be here. But will Cardano’s price continue to climb after breaking above key resistance?
CCN examines this possibility in this analysis using several indicators and historical data.
Cardano Overcomes Rejection
Between March 9 and May 7, Cardano’s price traded within a descending channel on the 4-hour chart. Amid this drawdown, ADA faced several rejections after trying to break above the channel’s upper boundary.
But yesterday, bulls successfully helped breach the hurdle, and ADA retested $0.80. Following the price increase, the Money Flow Index (MFI) rating climbed to 92.51, indicating notable buying pressure around the cryptocurrency.
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In line with the MFI position, the Awesome Oscillator (AO) also soared to the positive region at 0.072. The AO measures momentum by comparing recent price movements with historic ones.
Negative AO readings signify bearish momentum, while positive readings imply bullish momentum. Therefore, the current AO position indicates bullish momentum around Cardano’s price.
Should this trend continue, ADA will likely trade higher in the short term.
A closer look at the ADA liquidation heatmap reveals a significant concentration of liquidity around the $1.10 mark.
For context, the heatmap highlights potential price levels where large-scale liquidations could occur, offering traders insight into high liquidity zones.
These areas, marked in yellow, suggest that if Cardano’s price continues its momentum, it could breach $1 as long as the current technical setup holds.
ADA Price Analysis: Bullish Trend Strengthens
Looking at the daily chart, we noticed that Cardano’s price traded in a descending channel before, like on the 4-hour chart. But it has broken above the upper trendline of the bearish pattern.
Following this move, ADA printed two consecutive daily green candlesticks, validating the bullish trend. In addition, the Relative Strength Index (RSI) has hit its highest level since March, indicating bullish momentum.
If this trend continues, Cardano’s price might break the resistance at $0.92. If successful, the altcoin’s value could hit $1.02 at the 0.236 Fibonacci level.
The market price could climb to $1.18 in a highly bullish scenario. On the flip side, if momentum turns bearish, this prediction might not pass, and ADA’s could fall toward $0.66 near the 0.786 Fib level.
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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