Cardano (ADA), the native token of the Cardano blockchain platform, is hinting at a potential price surge in the coming days. Analysts are eyeing a breakout above a key technical level that could trigger a 10% rally.
Descending Trendline in Focus
Currently, Cardano’s price is revisiting its descending trendline. This trendline is formed by connecting a series of swing highs, acting as a resistance level that the price has struggled to surpass in recent months. A decisive break above this trendline is often seen as a bullish signal, indicating a shift in the underlying market sentiment.
Technical Indicators Flash Green
Adding fuel to the bullish fire is the presence of a bullish divergence on Cardano’s chart. Technical indicators like the Relative Strength Index (RSI) and the Awesome Oscillator (AO) are showing signs of positive momentum despite the recent price dip. This divergence suggests that the price may be ready to reverse its course and head upwards.
Potential Price Targets
If Cardano manages to break above the descending trendline, analysts predict a 10% rise towards the $0.426 resistance level. Furthermore, a daily candlestick close above $0.426 could extend the rally by another 31%, potentially reaching the 50% retracement level of $0.564.
Risks Remain
However, the cryptocurrency market is known for its volatility, and Cardano is no exception. If the daily price falls below the critical support level of $0.317, it could invalidate the bullish thesis and trigger a 10% drop towards the November 2023 low of $0.283.
Overall, the technical outlook for Cardano appears cautiously optimistic. A breakout above the descending trendline coupled with supportive technical indicators suggests a potential price increase. However, investors should remain aware of the inherent risks associated with the cryptocurrency market and practice proper risk management strategies.