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Will the Cardano (ADA) Price Increase Following This Bullish Pattern?

3 mins
Updated by Ryan James
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In Brief

  • ADA has formed a bullish triple bottom pattern and broken above a short-term descending resistance trendline.
  • The triple bottom coincided with RSI-based bullish divergence, a signal typically preceding bullish trend reversals.
  • However, if ADA closes below $0.24, the bearish trend may persist. This could potentially lead to new lows.
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The price of Cardano (ADA) has created a bullish triple-bottom pattern since the beginning of July.

The pattern was created inside the $0.24 horizontal support area, which has existed since the beginning of the year. Will the price react positively to this bullish pattern?

Cardano Creates Bullish Pattern

 The analysis of the daily chart for ADA reveals that its price has declined since reaching a yearly peak of $0.46 in April. This decline reached a low point of $0.22 on June 10.

Following this drop, the price of Cardano experienced a rebound. It formed a long lower wick (black icon) and confirmed the $0.24 level as a support zone.

Subsequently, ADA revisited the $0.24 support area on two occasions, namely August 17 and September 11 (green icons). This created a triple bottom pattern, which is typically seen as bullish.

Despite this bullish pattern, ADA has yet to make any upward movements.

In the news, Cardano founder Charles Hoskinson has expressed shock at what he believes is unfair media coverage of Sam Bankman-Fried. More specifically, he says, “The Bernie Madoff of my generation is getting a free pass by the media.”

Mr. Hoskinson also introduced a new privacy-focused sidechain called Midnight Protocol. Its three core visions are based on Freedom of Association, Commerce, and Expression, leading to the acronym ACE.

Cardano (ADA) Price Movement
ADA/USD Daily Chart. Source: TradingView

The daily Relative Strength Index (RSI) suggests the trend is bullish.

Traders use the RSI as a momentum indicator to gauge whether a market is overbought or oversold, helping them decide on buying or selling assets.

An RSI reading above 50 during an upward trend indicates an advantage for bulls, while a reading below 50 suggests bears are in charge.

Notably, the RSI has shown significant bullish divergence (green line) during the formation of the triple bottom pattern.

This divergence occurs when an increase in momentum accompanies a decrease in price, often signaling a reversal towards a bullish trend.

ADA Price Prediction: Can Short-Term Breakout Kickstart Reversal?

Taking a closer look at the price action, ADA made a breakout from a descending resistance trendline on September 15.

While the altcoin didn’t immediately increase, it picked up its pace at the beginning of October, culminating with a high of $0.27 on October 2.

Therefore, it’s reasonable to anticipate that the most probable future movement for the cryptocurrency is an upward push, aiming for at least the $0.31 resistance zone.

This zone corresponds to both the 0.5 Fibonacci retracement resistance level and a horizontal resistance area. It stands 20% higher than the current price.

A successful reclaim of this area would not only confirm the triple bottom pattern but also validate the overall bullish ADA trend reversal.

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

However, it’s essential to note that despite this optimistic ADA price projection, if the price falls below the $0.24 horizontal zone, it would negate both the longer-term triple bottom pattern and the short-term bullish outlook.

In such a scenario, a 30% decline to $0.18 becomes a more likely possibility. The bottom is found by using the 1.27 external Fib retracement of the most recent increase.

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

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Disclaimer

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. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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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. (I do not have a discord and will not contact you first there. Beware of scammers)
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