As of now, Cardano (ADA) is treading water around $0.71, creating an intriguing backdrop for traders and investors alike. This price behavior is not just a random fluctuation; rather, it represents a calculated pause in its upward trajectory, as veteran chartist Maelius points out. With seven years of ADA/USD history compressed into a single chart, it’s clear that despite a hefty 45% retracement from the heights it reached in late 2024, the foundational structure of Cardano remains intact. Such a resilient trend-line connects every cycle low that emerged after the tumultuous Covid panic in 2020. The recent dip into the demand zone, stretching from approximately $0.57 to $0.78, presents a textbook scenario for a higher low (HL) that showcases the ongoing bullish sentiment.
A Closer Look at Support Levels
Interestingly, the most recent trading action suggests that ADA is firmly resting above the 50-week exponential moving average of around $0.66, reinforcing the idea that traders might have a winning bet in their sights. This moving average had previously acted as a trampoline for ADA, launching it into a vertical breakout that nearly hit $1.31 in March of 2024. The possibility of reaching the upper boundary of the current upward-sloping channel, estimated to be close to $1.50, is increasingly plausible. A decisive break above this demand zone could catalyze a monumental price surge, provided that momentum indicators align to back up this upward move.
Analyzing Momentum Indicators
However, it is critical to approach this situation with caution. The weekly relative strength index (RSI) is currently at a neutral 49, reflecting a market waiting for a definitive signal before breaking out. Despite the caveat, an encouraging pattern emerges; the RSI has been forming a series of higher lows within a falling wedge since hitting its March peak. While the down-sloping resistance remains a hurdle, it shouldn’t be overlooked that the Wave-Trend Oscillator indicates a potential shift in momentum. Having recently bled into oversold territory around -50, it appears poised for a bullish cross, raising eyebrows among market participants.
The Bigger Picture: Market Structure and Sentiments
From a macro perspective, Cardano is still holding an unbroken series of higher highs and higher lows on the weekly chart—a compelling argument in favor of holding onto ADA for the long term. The downtrend line from Cardano’s all-time high over a year ago was breached, and the most recent correction looks more like a healthy throwback rather than a precursor to a severe downturn. If ADA keeps respecting the lower boundary of the demand zone (~$0.57), the bullish narrative continues to gain steam.
Potential Price Levels: The Next Stop
Looking ahead, ADA’s next resistance levels are critical. The $0.81 mark, established by a swing high in March 2024, looms large, followed by the significant December 2024 high at $1.31 and the upper channel boundary nearing $1.50. If the RSI breaches the 60 level and the Wave-Trend Oscillator confirms with a bullish cross, it would signify that ADA is no longer at a standstill but rather propelling itself toward materially higher prices. Such developments, should they occur, could validate the optimistic outlook shared by analysts like Maelius, who strongly believe that a fresh upswing is on the horizon.
The Community’s Optimism and Market Dynamics
This buildup of positive sentiment in the Cardano community cannot be ignored. Investors are not simply placing bets on numbers; they are investing in the technology and vision that Cardano brings to the blockchain space. As the cryptocurrency landscape becomes more competitive, ADA’s unique framework sets it apart, and bolstering community trust will be crucial for sustaining momentum.
While doubt may still linger, the indicators suggest that Cardano is positioned for an upswing. Careful analysis of support levels, price action, and momentum gauges illustrates a compelling case for bullish optimism. If Cardano continues to demonstrate resilience in its price structure, it could well embark on a journey towards higher price thresholds that have long eluded it.