Cardano (ADA) broke out from diagonal and horizontal resistances
The ADA price reached a new yearly high on Nov. 16 before falling.
Will ADA maintain its momentum and eventually increase above $1?
The ADA price has increased rapidly since Nov. 5, reaching a new yearly high on Nov. 16. This was a 160% appreciation, possibly spurred by positive Cardano news.
After last week’s news of a collaboration with Donald Trump, Cardano founder Charles Hoskinson posted a picture in front of a SpaceX rocket, sparking rumors about a partnership with Elon Musk and the newly created DOGE agency.
Cardano’s memecoin SNEK is also nearing the top 250 largest cryptocurrencies.
With that in mind, let’s look at the ADA price action and see if the price can maintain its increase toward new highs.
ADA Breaks Out
The weekly time frame ADA chart shows the price increased rapidly in November after breaking from a descending resistance trend line. This week, the third successive bullish weekly candlestick is being created.
Besides the resistance trend line, the Cardano price also broke out from an inverse head and shoulders pattern and has increased more than its height.
Furthermore, ADA moved above the $0.60 horizontal resistance area, which has existed since May 2022. The area is now likely to act as support.
If ADA continues increasing, the next long-term horizontal resistance will be $1.15, which was last reached in April 2022.
Technical indicators support the upward movement. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) generated bullish divergences (green) before the breakout, legitimizing it.
The indicators are above their bullish thresholds at 50 and 0, respectively, and have not generated bearish divergences.
So, the weekly time frame gives a bullish Cardano prediction, suggesting the increase will continue toward the next long-term resistance.
ADA to $1.20
The 3-day time frame wave count suggests that ADA has started either an A-B-C structure or a new five-wave increase in May. While the exact pattern remains uncertain, wave C/3 has extended and will likely have at least 1.61 times the length of wave A.
The sub-wave and minor sub-wave counts are shown in black and yellow, respectively. If the count is accurate, the price has started minor sub-wave four in sub-wave three.
Giving wave C/3 1.61 times the length of wave A leads to a target of $1.25. Combining this with the previously outlined $1.15 horizontal resistance area gives a target range of $1.15-$1.25 for the top of the upward movement.
The reaction once ADA gets there will determine whether this is a new upward movement that will lead to a new all-time high or simply a retracement in response to the prior decline.
New ADA Yearly High
The weekly and 3-day Cardano charts suggest the ADA upward movement will continue.
The main target for the top of the increase is between $1.15 and $1.25. Short-term declines could occur until ADA reaches its target.
