Key Takeaways
Cardano (ADA) holds above a crucial horizontal demand zone after an extended corrective phase.
Price action shows early signs of potential reversal as momentum indicators bounce and a descending resistance line is tested.
The broader Elliott Wave context suggests this move could mark the end of a complex WXY correction, potentially setting the stage for a new bullish impulse, but did it end?
ADA Price Analysis
The 4-hour chart shows ADA completing a clear five-wave impulse from October to December 2024, culminating near $1.30.
This was followed by a complex corrective pattern labeled as a WXY structure, although it is still uncertain whether it ended at its recent low of $0.62.
This level aligns with the demand zone, which has been supporting since the Feb. 3 capitulation and the ending point of the first three-wave move.
Currently, the price is on a slightly upward trajectory, recovering around 9% since its recent bounce, but it is still within the descending structure drawn from the assumed X wave.
The RSI reached oversold levels during the March 31 decline and has now bounced back above the 40 level, signaling a possible shift in momentum.
If this support holds, it could signify the completion of the corrective wave Y and initiate a new impulsive advance.
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Key resistance levels to the upside remain at $0.70 (0.618 Fib retracement) and $0.821 (0.5 Fib).
However, a breakdown below $0.622 would jeopardize the bullish thesis and open the door toward $0.53 or even $0.407.
ADA Price Prediction
The 1-hour chart offers a closer view of ADA’s bounce from the $0.62 support zone, which has repeatedly held during recent tests.
The structure appears corrective, with an ABC pattern likely having completed into the green zone.
Following this, the price has made a higher low and is attempting to break above the descending trendline connecting recent swing highs.
There are two main scenarios ahead. The bullish outlook assumes that the ABC correction has concluded, and the current move starts a five-wave impulsive sequence.
In this case, a break above $0.70 would confirm the start of wave 3, targeting $0.812 (0.5 Fib) and potentially $0.929 (0.382 Fib) as the next resistance level.
Alternatively, if the current move proves corrective, the recent rally may only be wave b of another downward zigzag, implying a retest of $0.622 or even a deeper dive toward $0.53 (0.786 Fib).
However, RSI momentum supports the bullish case, showing a strong reversal from oversold with no immediate divergence.
Confirmation lies in how the price reacts at $0.70–$0.73.
A sustained breakout above this range would favor bulls and confirm wave (1) or (iii) development.
Key Levels to Watch
- Immediate Resistance: $0.70 (descending trendline).
- Short-Term Target: $0.812 (0.5 Fibonacci retracement).
- Major Resistance: $0.929 (0.382 Fibonacci retracement of entire drop).
- Immediate Support: $0.622 (0.618 Fibonacci retracement and horizontal demand).
- Critical Support: $0.530 (0.786 Fibonacci retracement).
- Invalidation Zone: Below $0.407 (WXY structure invalidation).
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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