The price of Cardano (ADA) has recently surpassed a long-term downtrend line, opening up expectations for a significant market reversal. At the time of writing, ADA is trading around $0.81, recording a 5.1% increase in just 24 hours.
The current bullish momentum is driven by new buying power and widespread positive sentiment in the investor community. Technical indicators suggest that ADA is preparing for a breakout, with growth targets potentially reaching 40%, bringing the price to the $1.082 range.
However, for this bullish scenario to materialize, ADA must hold above important support levels – key thresholds that help reinforce recovery momentum and protect the emerging positive trend.
ADA price forms a reverse head and shoulders pattern
The TapTools analysis platform recently emphasized the emergence of a potential reverse head and shoulders pattern on the Cardano (ADA) price chart – a classic technical pattern often signaling a strong bullish reversal.
According to the description, the 'head' is formed at the deepest bottom around $0.557, while the two symmetrical 'shoulders' are higher swing lows, at approximately $0.682 and $0.557 respectively. This structure suggests that ADA is in the process of establishing a base to bounce back, opening up expectations for sustainable growth if the price surpasses the neckline of the pattern.
Source: TapTools, X
In the forming reverse head and shoulders pattern, the important neckline is around $0.762 – coinciding with the 23.6% Fibonacci retracement level. A daily close above this threshold will confirm the pattern and open up the possibility of a breakout to the $1.082 area, equivalent to an approximate 40% increase from the current level. Such a scenario would indicate that ADA is firmly recovering from the recent bottom and returning to an upward trend.
However, if ADA fails to hold above the neckline and turns downward, the support area at $0.686 will be a crucial anchor. Maintaining this level could help preserve the bullish structure and keep the expectations of a strong recovery trend in the medium term.
ADA price prediction highlights the breakout of the main trendline
The price of Cardano (ADA) has officially escaped the long-term downtrend – a significant turning point for this token's recovery expectations. According to analyst Lucky, the recent breakout has marked a distinct transition from a weakening phase to a more positive trend.
The breakout of the downtrend line, combined with the recent stable price increase, is reinforcing the possibility that ADA is entering a new accumulation zone – a phase that often signals the formation of the next sustainable growth period.
Source: Lucky, X
ADA is currently approaching a significant resistance zone between $0.85 and $0.95 – a technical barrier that could shape the short-term trend. If the price decisively breaks through this zone, it will confirm the strength of the current uptrend and potentially attract new cash flow from investors, pushing the price to the next target at $1.082.
Simultaneously, ADA has also risen above the 50-day moving average – a positive signal reinforcing the long-term growth outlook. This MA line can now serve as an important dynamic support area, providing a solid foundation for a more sustainable uptrend in the near future.
Volume and sentiment support ADA's price increase
The recent price increase of Cardano is not only a technical rebound but also comes with a significant increase in trading volume – an important factor indicating the true strength of the reversal trend. This increase reflects a growing interest from both retail investors and institutions, creating the necessary liquidity to sustain and reinforce a stable upward momentum.
Adding to the positive outlook, a recent analysis report indicated that if ADA breaks the forming flag pattern, the price could target the $1.33 range – equivalent to an impressive 89% increase. However, this depends on ADA confirming a breakout above important resistance levels.
In addition, maintaining strong support above $0.70 along with increased cash flow from long positions continues to be key factors driving bullish prospects in the short to medium term.
Important levels to watch for ADA price recovery
To maintain the current bullish momentum, ADA needs to defend some important technical support levels. The nearest support level is at $0.686 – the lower boundary of the triangle pattern which coincides with the recent swing low, serving as a crucial anchor for the current trend.
Another decisive factor is ADA's price surpassing the neckline of the reverse head and shoulders pattern around $0.762. This is not only a key resistance level but also coincides with the 23.6% Fibonacci level, increasing its significance. If ADA can close daily above this level, the reversal pattern will be confirmed, laying a solid groundwork for a potential price increase towards the target area of $1.082.
In the event that ADA cannot maintain its breakout momentum, a retest of the deeper support area around $0.557 is entirely possible – this could prolong the current accumulation phase.
Currently, ADA is trading around $0.749, having recovered strongly from the support level of $0.6598 and increased over 5% in the past 24 hours. This move indicates growing confidence from investors, while also reinforcing the outlook for a clear breakout towards the important psychological milestone: $1.
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Minh Anh
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making decisions. We are not responsible for your investment decisions.