- Cardano (ADA) finally broke out of a prolonged consolidation period that began on November 2020.
- Now, the token seems to be targeting a market value of $2.00.
- As long as the $0.21 support holds, the bullish outlook will remain.
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Even though Bitcoin has stolen the crypto spotlight after rising to a new all-time high near $35,000, Cardano is poised to compete with it. Cardano’s ADA token is developing a massive bullish pattern on its weekly chart that may see its price rise by more than 900%.
Cardano Sits on Top of Stable Support
Cardano was able to break through the $0.176 resistance barrier following a month-long stagnation period. The bullish impulse saw the price of ADA surge more than 30% to hit a high of nearly $0.24 this week for the first time since May 2018.
While the upswing generated a lot of attention around the cryptocurrency community, some investors took advantage of the upward price action to book some profits.
The spike in selling pressure saw the eighth-largest cryptocurrency plunge by over 20% within a few hours after testing the $0.24 mark. Despite the massive losses generated across the board, market participants appear to have bought the dip.
Cardano was able to regain $0.21 as support, and now it awaits further buying pressure.
IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model suggests that $0.21 plays a crucial role in Cardano’s trend. Transaction history shows that this is the largest demand barrier underneath it that could hold falling prices at bay. Nearly 2,400 addresses have previously purchased 34 million ADA.
Such a significant interest area could absorb some of the downward pressure if investors continue booking profits, preventing Cardano from falling further. That said, if this support level breaks, the IOMAP cohorts show that the next significant hurdle reinforcing ADA’s uptrend sits around $0.19.
Despite the grim worst-case scenario, the IOMAP model reveals that Cardano faces little resistance ahead. If buy orders begin to pile up, this cryptocurrency could easily move past the $0.22 wall as only 1,100 address bought over 16 million ADA around this price level.
Therefore, it will not take an enormous amount of buying pressure to send prices higher in the future.
A 900% Bull Rally on the Horizon
When looking at Cardano from a macro perspective, namely the 1-week chart, $0.21 seems to be even more significant. This price hurdle coincides with the neckline of an inverse head-and-shoulders pattern developed within this time frame since November 2018.
A weekly candlestick close above the $0.21 support will signal a breakout of this technical formation, which could lead to a 900% upswing towards $2. This target is determined by measuring the distance between the pattern’s head and the neckline and adding it to the breakout point.
Given the high probability of massive gains on the horizon, holders should be looking to fortify their positions instead of trying to take advantage of daily volatility. Regardless, a downswing below $0.075 will invalidate the inverse head-and-shoulders pattern’s target of $2.
Disclosure: At time of writing, this author owned Bitcoin and Ethereum.
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