Cardano (ADA) price analysis: reversal pattern suggests a 62% rally
ADA could gradually move up in the short term
Contents
- Cardano technical analysis: Weekly chart
- Cardano technical analysis: Daily chart
- Cardano: Buy or sell at current levels?
Investors have been accumulating Cardano at lower levels in anticipation of the Vasil hard fork which is in the final stages of development. The buyers are attempting to arrest the decline in Cardano near $0.53 and form a higher low as of 18 August 2022.
The Vasil hard fork was initially planned for June, but was postponed because of technical issues. Although no new official date for the hard fork has been set, Cardano founder Charles Hoskinson said in a recent video that “Vasil is looking good.”
Hoskinson said: “1.35.3 is out, and that’s probably going to be the node unless something is discovered that the hard fork combinator event is pushed for. So it’s being rapidly adopted and tested and played around with by the community.”
The market intelligence firm Messari said in a tweet recently that Cardano is “priced more aggressively” compared to other growing ecosystems. It said that Cardano’s daily transactions were the lowest among the competitors and the token trailed Solana and Algorand in terms of total value locked in the decentralised space. However, in terms of annualised revenue, Cardano topped the other blockchains.
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Will the Vasil hard fork prove to be a turning point for Cardano? Will ADA go up or investors book profits after the event? Read the ADA price analysis below to find out what the charts suggest.
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Cardano technical analysis: Weekly chart
ADA’s price has been attempting to form a bottom near $0.40. Strong buying by the bulls pushed the price above the downtrend line of the falling wedge pattern. This is the first indication that the downtrend could be ending.
However, the ADA/USD pair is not out of the woods yet, as the relative strength index (RSI) remains in negative territory. This suggests that the momentum favours the bears.
If bears sink the price below $0.50, the pair could decline to the critical support of $0.40. This is an important level for the bulls to defend, because a break below it could signal the resumption of the downtrend.
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Conversely, if the price turns up from the current level and rises above $0.60, the recovery could reach $0.80. This level may again attract strong selling by the bears, but if the bulls clear this hurdle, the rally could extend to $1.20.
Cardano technical analysis: Daily chart
ADA’s price is attempting to form a rounding bottom pattern. If the price turns up from the current level and rises above $0.60, the bulls will attempt to clear the overhead hurdle at $0.64.
If that happens, the reversal setup will complete. The pair could then start a new uptrend, which has a pattern target of $0.88.
On the other hand, if the price turns down from $0.64, it will suggest that bears are active at higher levels. The immediate support on the downside is $0.50. If this level cracks, the pair could decline to $0.45 and then to $0.40.
Such a move could keep the pair stuck inside a large range between $0.40 and $0.64 for some time.
Cardano: Buy or sell at current levels?
Cardano’s price analysis shows that buyers are attempting to form a bottom. If bulls drive the price above $0.60, the pair could rally to $0.64. The bulls will have to clear this hurdle to signal a trend change. Conversely, a break below $0.50 could sink the pair to $0.45.
Whatever the outcome might be, your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you are about losing money. This analysis does not constitute investment advice. It’s important to make your own analysis before deciding to invest. You should never invest more than you can afford to lose.
