The Cardano (ADA) price has recently cleared a significant long and short-term horizontal resistance level, providing confirmation of a potential bullish reversal. This article will explore the reasons behind this forecast and analyze the technical analysis that supports this prediction.
Long-Term Descending Resistance Line Breakout
On March 30, the ADA price broke out from a long-term descending resistance line that had been in place for 325 days. Typically, such breakouts from long-term structures lead to significant increases, making this a promising sign for ADA’s future. The breakout was followed by the ADA price reclaiming the $0.425 resistance area, providing additional confirmation of a potential bullish reversal.
Daily Time Frame Analysis
Looking at the daily time frame, there are three main reasons for a bullish outlook on ADA. Firstly, the RSI breakout from its bearish divergence trendline (green line) often precedes breakouts in price, which was the case for ADA. The RSI is now above 50, supporting the continuation of the increase.
Secondly, the ADA price broke out from a long-term descending resistance line, as mentioned earlier. Such breakouts usually lead to significant increases.
Finally, the ADA price reclaimed the $0.425 resistance area, providing additional confirmation of a potential bullish reversal.
Short-Term and Long-Term Price Forecast
All signs point to the continuation of the increase toward the next resistance level at $0.520, making this the most likely ADA price forecast. A daily close below $0.425 would invalidate this bullish forecast and could cause a drop to the resistance line at $0.360.
Looking at the weekly time frame, the readings align with those from the daily one. In January 2023, the ADA price broke through a descending resistance line that had been in place since the all-time high in August 2021. The ADA price subsequently validated it as support in March 2023 and created a higher low. More importantly, ADA broke out from the long-term $0.425 horizontal resistance area last week, which aligns with the short-term one. This movement was also combined with an RSI increase above 50.
Therefore, the weekly time frame supports the continuation of the increase toward the next resistance, which in this timeframe is at $0.570. This bullish ADA price forecast would be invalidated with a weekly close below 50. In that case, ADA could drop to $0.320.
In conclusion, the most likely ADA price forecast is an increase toward the next resistance levels at $0.525 and possibly $0.565. A close below $0.425 would invalidate this bullish outlook. If that occurs, ADA could decrease to $0.320. Overall, the technical analysis indicates that the Cardano (ADA) price is showing strong bullish signals, indicating a potential significant upward movement in the future.
