Cardano's price has seen a significant surge in the past 24 hours, rising nearly 10% amid a spike in trading activity. This increase is attributed to heightened demand for altcoins, reflected in its trading volume. During the reporting period, the trading volume exceeded $1 billion.
Technical analysis suggests that if buying pressure can be maintained, the price of Cardano may rebound to the highest point in two years at $1.32. Here are the specific methods.
Cardano is set to break out of the bearish pattern
BeInCrypto's assessment of the ADA/USD daily chart shows that Cardano has been within a descending triangle since climbing to a two-year high of $1.32 on December 3. This bearish pattern forms when the asset price creates a series of lower highs while maintaining horizontal support. This indicates a surge in selling pressure as traders liquidate their holdings for profit.
However, the revival of ADA demand in the past 24 hours has pushed its price to the upper line of the descending triangle, making a breakout above possible. When the asset price approaches the upper line of the descending triangle, it indicates a potential retest of the resistance level within a bearish continuation pattern. A successful breakout above this line would signal a bullish reversal and confirm the strength of the uptrend.
According to the daily chart readings of ADA, this breakout could occur soon as buying pressure intensifies. For instance, the Elder-Ray index of the token has returned to positive territory for the first time since December 13, further confirming this bullish outlook. As of the writing of this article, the indicator stands at 0.057.
The Elder-Ray index of the asset measures the strength of bulls and bears in the market. Similar to ADA, positive values indicate bullish pressure, suggesting that buyers are in control and driving prices up.
Moreover, as of the time of writing, the MACD line (blue) of ADA is poised to cross above its signal line (orange). This setup indicates a potential bullish crossover, suggesting that the upward momentum of the asset's price is strengthening. This indicates that buying pressure is increasing, which is typically interpreted as a precursor to a price uptrend.
ADA Price Prediction: Will it Break Out or Retreat?
As of the writing of this article, the trading price of ADA is $0.92, sitting at the upper line of a descending triangle. The increased buying activity suggests a potential breakout above this key resistance level, which could drive the price of Cardano to a new high in two years.
However, if the resistance level of $0.92 is not breached, it may reaffirm the downward trend, erasing ADA's recent gains. In this case, the price could fall to the support level of $0.84, nullifying the bullish outlook.
