Cardano’s momentum builds: Could ADA break $4-$6?

By Peter Macharia - Technical Analyst
Cardano
Created by Taqi Khan from BTCRead

Cardano (ADA) has drawn bullish attention from crypto analyst Ali, who compares its current price movements to its patterns from 2020.

In a recent X post, Ali pointed to ADA’s historical trends as a start for his approach, expressing plans to accumulate more even if the price drops to $0.76. He disclosed intentions to take profits between $4 and $6, signalling high confidence in the cryptocurrency’s long-term potential driven by recurring market cycles.

Historical market cycles mirror current trends

On the weekly chart, Ali noted that ADA recorded major gains following prolonged consolidation phases during previous market cycles. ADA surged over 4,095% after breaking out of a 75% correction zone post-COVID crash. Similarly, the second cycle saw a 2,210% rally during the 2020-2021 bull run, driven by accumulation and recovery.

Source: X

Currently, ADA is replicating these trends, having emerged from a 65% correction and breaking out from an accumulation phase. Key technical indicators suggest a possible extended rally phase that could propel ADA to new heights by mid-2025 if historical patterns hold.

Market activity and price volatility

As of press time, ADA’s market data displayed heightened volatility, with the token experiencing a decline of 8.04% over the previous day. The price dropped to $1.03, accompanied by an increase of 107.69% in 24-hour trading volume, now at $3.85 billion. This surge in activity likely stems from broader market volatility and increased selling pressure.

Source: CoinMarketCap

The price chart for ADA highlights a steep drop from $1.12, followed by an unstable recovery trajectory. While the decline suggests selling pressure, its circulating supply of 35.1 billion ADA assures market liquidity, keeping investors focused on key support levels.

Technical indicators and liquidation data

According to technical data, ADA’s 4-hour chart shows a 2.42% recovery to $1.014 after a sharp drop from a recent high near $1.40. Bearish momentum remains dominant, with the MACD showing a bearish crossover, signalling weakening price strength.

Source: TradingView

At the same time, the RSI is reading 28, which means it has entered the oversold zone and could rebound if buying pressure increases. The signal is there, but the recovery still remains fragile, as depicted by the cautious sentiment in the market.

ADA’s liquidation data points to the risks of inverse trading in highly volatile markets. Liquidations sharply increased when ADA’s price fell from $1.40 to below $1.00, with long positions leading the way.

Source: Coinglass

The rapid rise in late November attracted traders to long positions, but they faced heavy liquidations as the price reversed in December.


Related: Cardano price surge: Trump rally or temporary spike?

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Peter Mwangi is a skilled crypto news writer with over three years of experience in the writing industry. He is known for his well-researched, insightful content and has contributed to major crypto publications. Peter, committed to learning and teamwork, brings great storytelling and leadership skills to the BTCRead team.
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