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Cardano (ADA) Price Closes Bullishly for the First Time in 5 Weeks – What’s Next?

Analytics

beincrypto.com 05 December 2022 09:50, UTC
  
Reading time: ~3 m

The Cardano (ADA) price has broken down from a long-term horizontal support area but is trading inside a bullish pattern.

ADA is the native token of the Cardano blockchain platform. It falls into the smart contract category. The digital asset was created by Charles Hoskinson.

The Cardano price has fallen below a descending resistance line since creating an all-time high price of $3.101 in Aug. 2021. The downward movement led to a low of $0.295 in Nov. 2021.

The downward movement seemingly caused a breakdown below the $0.350 horizontal support area. This is a crucial level since it has acted as support since the beginning of 2021 and if the final support area before the $0.150 one, which is more than 50% below the current price.

Despite the breakdown, the weekly RSI has generated bullish divergence (green line). This is a bullish sign that often precedes upward movements. The fact that it transpires in the weekly time frame further increases its legitimacy.

As a result, the weekly time frame shows conflicting signs between the price action and technical indicator readings.

A reclaim of the $0.350 area and subsequent breakout from the descending resistance line would confirm the bullish ADA price prediction. On the other hand, a rejection would likely catalyze a fall towards $0.15.

ADA/USDT Daily Chart. Source: TradingView

Cardano Price Prediction: Will Bullish Pattern Break out This Week?

The technical analysis from the daily time frame shows that the ADA price has traded in a descending wedge since the beginning of May. The descending wedge is considered a bullish pattern, meaning that a breakout from it would be the most likely scenario. The ADA price increased over the past 24 hours and is now in the middle of the wedge.

The daily RSI supports the continuation of the upward movement. The indicator has generated bullish divergence and is in the process of moving above 50. This provides a bullish outlook for the future price

ADA/USD Six-Hour Chart. Source: TradingView

Finally, the short-term two-hour chart shows that the Cardano price is trading at the resistance line of an ascending parallel channel. But, it has reclaimed the $0.32 resistance area.

A breakout from the channel would confirm that the ADA price is moving toward the resistance line of the wedge. Conversely, a fall below the $0.32 area would indicate that new lows are likely.

ADA/USD Two-Hour Chart. Source: TradingView

For BeInCrypto’s latest crypto market analysis, click here.

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