Cardano (ADA), a leading cryptocurrency, is demonstrating persistent efforts to surpass a key resistance benchmark that has capped the asset’s price for the past three months. After moving above a recent downtrend line, ADA’s value has been on an upward trajectory since October, hitting a peak of $0.68 in December last year. Despite this progress, ADA is yet to convincingly break through the long-standing resistance zone, which continues to be a significant hurdle.
Indicators of a Bullish Trend
The struggle at the resistance level is evident in the pattern of long upper wicks on the weekly chart, hinting at a continued selling pressure at this price range. However, the cryptocurrency is gaining momentum, as suggested by the consistently positive performance of the Relative Strength Index (RSI). The RSI’s current upward trajectory above the midline of 50 points to a potentially bullish phase, edging closer to the overbought threshold of 70, implying that investors may still be in a favorable position.
Positive Signs on the Daily ADA Chart
A closer look at the daily chart supports the optimistic view, with ADA breaking out of a downward trend on February 8th alongside an accompanying RSI rise, signifying bullish momentum. Using Elliott Wave theory—a tool for analyzing price patterns and market psychology—further corroborates the potential continuation of ADA’s rise. According to this theory, ADA appears to be in the last wave of an uptrend that began in June of the previous year.
The anticipated peak of this wave, based on Fibonacci retracement analysis, suggests a target price of $0.83, marking a substantial 45% increase from the current level. Nonetheless, a failure to maintain upward momentum and close above the $0.58 resistance could lead to a notable correction to the $0.48 support level, translating to a 15% decline.
Investors and traders are closely monitoring these technical levels to gauge ADA’s potential for a breakout or retracement, as the crypto asset navigates through its critical resistance areas.
