Cardano (ADA) is showing a bullish falling wedge pattern on the daily chart, signaling a potential breakout.
The chart analysis by “S_CAPITAL” on TradingView highlights favorable entry points at $0.4063, with a stop loss below $0.3096 and a potential upside target of $0.72.
Recent data from IntoTheBlock reveals a surge in whale activity.
The cryptocurrency market is witnessing a resurgence, with renewed investor interest propelling altcoins like Cardano (ADA) to recover from their recent losses.
Amidst this revival, a comprehensive analysis by “S_CAPITAL” on TradingView has uncovered a potentially profitable opportunity for traders, as Cardano’s price action is exhibiting a bullish falling wedge pattern.
This technical formation, which is characterized by two converging trendlines sloping downwards, typically indicates a potential bullish reversal, suggesting that Cardano may be on the cusp of a significant breakout.
Cardano’s Falling Wedge Pattern Hints at Imminent Reversal
The ADA chart, which was based on the 24-hour time frame by the analyst, showcases a compelling bullish pattern.
As the price pattern narrows, the analyst emphasizes that a breakout to the upside is imminent, noting that such patterns have historically demonstrated a high success rate, making this setup particularly appealing for traders.
The bullish outlook is further reinforced by strong support levels, with the analyst highlighting that ADA has consistently found support in the $0.35 range, bouncing off these levels on multiple occasions.
Notably, the analyst has identified favorable entry points for Cardano at $0.4063, with a stop loss placed below $0.3096 to mitigate downside risk. The chart also displays an attractive risk/reward ratio of 3.11, indicating that the potential reward is more than three times the risk involved in the trade.
Accordingly, the trader has set a target price of $0.72 following a successful breakout rally, representing a potential upside of approximately 76.10% from the current levels.
Further validating the potential for an incoming rally in Cardano’s price is the relative strength index (RSI) located at the bottom of the chart, which is exhibiting a bullish divergence.
Despite the price moving downwards, the RSI has been trending upwards, suggesting that the selling pressure is waning. This divergence is often considered a precursor to a price reversal, adding further credence to the bullish outlook.
