Cardano is trying to solidify a bullish breakout above its long-term horizontal resistance. In this analysis, we will find out what ADA’s chances of success are. Cardano’s price has shown bullish breakout moves. Let’s find out if ADA can break above the longer-term horizontal resistance, which is almost three months old.
Cardano (ADA) approaching Long-Term Resistance
The weekly timeframe shows that Cardano’s price has been rising rapidly since October. This upward move culminated in a high of $0.68 in December 2023, a new yearly high. Despite the rise, ADA failed to break through the long-term horizontal resistance area. Instead, the price formed five consecutive long upper wicks, which are considered signs of selling pressure.
After a decline that lasted a month, the token has found its footing and is trying to break through again above the long-term resistance area.
The weekly relative strength index (RSI) is bullish. It is above the neutral level of 50, rising, and has almost crossed the 70 mark. All these are considered signs of an uptrend.
Cryptocurrency traders and analysts on Platform X (formerly twitter), are positive about Cardano’s prospects.
StakeWithPride wrote that institutional inflows into ADA in the first six weeks of 2024 were almost equal to capital inflows for all of 2023.
Cardano saw inflows in the first 6 weeks of 2024 almost equal to the entire 2023 year.
YTD flows are almost the same as Ethereum (11M vs. 13M).
These flows are all institutional BTW. #Cardano $ADA https://t.co/SRC5EV4AlD pic.twitter.com/nM4AU8wN5D
— St₳kΣ with Pride 🌈 (@StakeWithPride) February 12, 2024
Meanwhile, Charles Hoskinson noted the difference in regulation between Ethereum and ADA: “Hey, look at this, Ethereum staking may be a regulated activity in Switzerland, but Cardano is not.”
However, Dan Gambardello does not believe that the price of ADA will rise above $1 before the Bitcoin (BTC) halving.
ADA Price Prediction: Will a Bullish Breakout Lead to a Price Rise?
The daily timeframe shows a bullish picture. The chart shows that on February 8, ADA broke through the descending resistance line, starting an upward movement. This breakout was accompanied by a rise in the RSI above 50, which supported the price movement.
The most likely scenario within the framework of Elliott wave analysis also supports continued growth. It suggests that ADA is in the fifth and final wave of a bullish structure that began forming in June 2023 .
If this calculation is correct, then the first potential target for the top is at $0.83, (Fibonacci level 1.61 of the external correction of the fourth wave). This target is 45% above the current price. Meanwhile, Cardano’s failure to close above the $0.59 horizontal resistance zone could trigger a 15% fall to the immediate $0.48 support level.
