The price of Cardano (ADA) has traded above the $0.24 horizontal support area since the beginning of the year.
Starting in July, Cardano created a bullish triple-bottom pattern above this area.
Cardano Hovers Above Horizontal Resistance
The daily timeframe technical analysis for ADA shows a downward movement ongoing since April 15, when the price reached a yearly high of $0.46. The decrease led to a low of $0.22 on June 10.
The Cardano price bounced afterward, creating a very long lower wick (black icon), considered a sign of buying pressure. The wick validated the $0.24 horizontal area as support.
After bouncing at the area several times, ADA created a higher low on October 12. It has increased at an accelerated rate since.
The movement since June resembles a triple bottom (green icons), considered a bullish pattern.
In recent news, Charles Hoskinson, the creator of Cardano, has voiced his astonishment over what he perceives as the unjust treatment of Sam Bankman-Fried in the media.
In his words, Hoskinson states, “The media is granting Sam Bankman-Fried, whom I consider the Bernie Madoff of our generation, an undeserved leniency.”
Additionally, Mr. Hoskinson has unveiled a novel privacy-oriented sidechain known as Midnight Protocol. The sidechain revolves around three fundamental principles: Freedom of Association, Commerce, and Expression, forming the acronym ACE.
Finally, the Cardano Summit is quickly approaching. It will be held on November 2-5 and will be accessible by Non-Fungible Token (NFT) tickets.
ADA/USD Daily Chart. Source: TradingView
The daily Relative Strength Index (RSI) provides a bullish reading.
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. A reading below 50 suggests bears are in charge.
While the RSI is right at the 50 line, it has generated considerable bullish divergence throughout the triple bottom pattern.
This divergence occurs when an increase in the RSI accompanies a decrease in price. It often precedes bullish trend reversals.
ADA Price Prediction: Can Cardano Sustain Increase?
A closer look at the ADA price action shows that on September 15, the price broke out from a descending resistance trendline.
While the altcoin didn’t immediately surge, it gained momentum in early October, reaching a peak of $0.27 on October 2. The cryptocurrency has fallen since and now trades just above the $0.24 horizontal support area.
ADA began another upward movement on October 16. But, it failed to sustain it, creating a long upper wick (red icon).
Because of the breakout and previous bullish divergence, it is likely that the future trend’s direction is upward, with a target near the $0.31 resistance zone.
This particular zone corresponds to the 0.5 Fibonacci retracement resistance level and a horizontal resistance area. It stands 20% above the current price.
Successfully regaining this area would not only confirm the triple bottom pattern but also validate the overall bullish trend reversal for ADA.
It is also worth mentioning that the number of total holders for ADA is at an all-time high of $4.47 million. This is the culmination of an ongoing increase since May 2023.
ADA/USDT Daily Chart. Source: TradingView
However, it’s crucial to emphasize that despite this positive ADA price action, if the price drops below the $0.24 horizontal zone, it would invalidate the longer-term triple bottom pattern and the short-term bullish perspective.
In such a scenario, a 30% decline to $0.18 becomes a more likely possibility.
This bottom level is determined using the 1.27 external Fibonacci retracement of the most recent increase.
