Analyst forecast: Cardano (ADA) price increases are far from over, and here's why
In the ongoing crypto bull market, Cardano (ADA) has significantly lagged behind the levels of the same period. Although Bitcoin surged to new all-time highs along with a slew of other altcoins, ADA is still about 77% below its all-time peak. However, emerging technology patterns and market dynamics suggest that this trend may reverse and the ADA may be poised to close the gap.
At the heart of this analysis is the bullish flag pattern on the weekly chart of the ADA/USD pair. The bull flag pattern observed here consists of two main elements: a flagpole and a flag. The flagpole is a significant vertical rise in price, representing a rapid increase in buying pressure. For the ADA, this pole was formed from mid-October to mid-December and reflected a surge of about 185%. #山寨季开始#
The flag pattern that follows the pole is a period of downward sloping consolidation, similar to a flag on a pole. The ADA's pole is in development from mid-December to early February. A subsequent breakout of the flag pattern usually results in an increase in price, proportional to the height of the initial bar.
Cardano price has broken through and broken through the key resistance level of $0.685. If the ADA follows this technical strategy further, the rally is far from over. The expected target is a 185% upside from the consolidation zone breakout point, bringing the price closer to the Fibonacci 0.382 retracement level, which is around $1.35.
It is worth noting that Cardano price must first break above the 0.92 Fibonacci retracement level of $0.236, where more selling pressure is expected and a shorter consolidation is possible.
The chart also hints at the formation of a golden cross, which is a bullish signal in which the short-term moving average (50-week EMA) crosses above the long-term average (200-week EMA). Such crossovers can often signal a shift in long-term momentum from bearish to bullish, and their importance is even more prominent on the weekly chart, filtering out short-term market noise.
Traders often see this crossover as a confirmation of a trend reversal and has the potential to boost ongoing buying activity. For ADA, this could be the final confirmation of a strong bullish move.
In addition to this, the ADA's weekly chart presents a broader narrative. The Relative Strength Index (RSI) is slightly above the overbought threshold of 74, suggesting strong buying momentum and more upside. Trading volumes, while lower than their peaks in 2021, remained consistent, suggesting that ADA trading interest was stable and there was no panic selling seen during the sharp decline.
In addition, a series of exponential moving averages (20-week, 50-week, 100-week, and 200-week) provide further context, as ADA is trading above all exponential moving averages. It is worth noting that the 200-week EMA has provided very strong support for the price recently, indicating long-term bullish sentiment.
The 50-week EMA is trending upwards, which could consolidate medium-term support. The 100-week and 200-week EMAs are further below the current price and could act as long-term support levels in the event of a price pullback.
In addition, the Fibonacci retracement levels plotted from the all-time highs to lows of the ADA bear market provide long-term price targets. At the end of the bull flag, the $0.5 level at $1.697 marks the midpoint of the previous swing highs to lows and can serve as the next target for bulls. Thereafter, $0.618 Fib at $2.04, $0.786 at $2.54, and the last all-time high of $3.17 will be follow-up price targets.
In conclusion, while the bull flag and the upcoming golden cross are the stars of the show, other factors such as moving averages, RSI, and Fibonacci levels add depth to Cardano's bullish narrative.
(Source: Jake Simmons)
