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Cardano (ADA) Price Hits Local Bottom – Can it Advance to $0.30?

3 mins
Updated by Ryan James
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In Brief

  • The ADA price has increased since completing a double bottom pattern on September 11. The price recently broke out form a descending resistance line.
  • The price action and the RSI readings both support the continuing of the increase. This is especially evident by the bullish divergence in the daily RSI.
  • While the ADA/USD chart is bullish, the ADA/BTC one shows several bearish signs, the most important being the presence of a descending triangle.
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The price of Cardano (ADA) has increased since completing a bullish pattern on Sept. 11. It broke out from a diagonal resistance line two days later.

While the ADA price is likely to increase against the dollar, the ADA trend against Bitcoin (BTC) remains firmly bearish.

Cardano Price Bounces After Double Bottom Pattern

The daily timeframe technical analysis shows that ADA has broken out from a descending resistance line which has been in place since July 14.

While following the line, Cardano fell to a low of $0.24 on Aug. 17. After returning to the same level on Sept. 11, the price bounced, effectively creating a double bottom. The double bottom is considered a bullish pattern, meaning that it leads to upward movements most of the time.

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The pattern gains even more significance because of the RSI readings. When evaluating market conditions, traders use the RSI as a momentum indicator to determine if a market is overbought or oversold, and to decide whether to accumulate or sell an asset.

If the RSI reading is above 50 and the trend is upward, bulls still have an advantage, but if the reading is below 50, the opposite is true.

The indicator is increasing and has nearly moved above 50. Furthermore, it has generated a significant amount of bullish divergence (green line). This is an occurrence where a price decrease is accompanied by a momentum increase. It often coincides with local bottoms and precedes upward movements.

Cardano (ADA) Price Breakout
ADA/USDT Daily Chart. Source: TradingView

The cryptocurrency has increased since the second bottom and has seemingly broken out from the aforementioned descending resistance line. If the increase continues, the next closest resistance will be at $0.30, nearly 25% above the current price.

On the other hand, if the upward movement fails to commence, ADA can fall by 10% towards its yearly lows at $0.22.

ADA Price Struggles Against Bitcoin

While the ADA/USD chart offers a bullish ADA price prediction, the price is still struggling against BTC. This is especially evident when looking at the price action, which shows a descending triangle. The descending triangle is considered a bearish pattern, meaning that it leads to breakdowns most of the time.

Cardano (ADA) Bearish Pattern
ADA/BTC Daily Chart. Source: TradingView

Moreover, the daily RSI is bearish. The indicator is below 50 and falling, both considered signs of a bearish trend.

A breakdown that travels the entire height of the triangle (white) will take the price to 700 satoshis, a decrease of 23%. On the other hand, a breakout can lead to a 15% increase to the next resistance at 1100 satoshis. Currently, this seems unlikely.

To conclude, the ADA price prediction is bullish against USD but bearish against BTC. A 25% increase is likely in the former while a 23% drop is expected in the latter.

For BeInCrypto’s latest crypto market analysis, click here.

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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.

Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.