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With a potential double bottom, Cardano prepares a bull cycle to challenge the overhead trendline. Will this reversal rally result in a breakout run to $1?
Maintaining a declining trend in the daily chart, Cardano has taken a massive hit over the past few months. Falling 54% since April, the ADA token is now down to $0.37 from the annual peak of $0.81 after facing the $1 psychological mark.
The lower high formation of the bearish trend leads to a resistance trendline formation. In addition to the $0.34 support level, a declining triangle is visible that keeps Cardano entrapped.
Cardano’s New Bull Cycle Within Triangle
Cardano shows a negative cycle from the overhead trendline in the daily chart, taking support from the baseline at $0.34. After a 13% drop this week, $ADA is up by 1.65% today and trades at $0.370.
With a $13.34 billion market cap, Cardano is the tenth biggest cryptocurrency. However, as per Coinglass, almost $2.5M worth of bullish positions were liquidated over Thursday and Friday.
The lower price rejection in the intraday candle teases a bullish recovery over the weekends. Furthermore, the support level has a history of providing a cushion for a bounce back.
The bullish divergence in the daily RSI line bolsters the possibility of a bullish cycle. However, the bearish trend in the MACD and signal lines continues with a rise in negative histograms.
Will Cardano Reach $1 in Q3 2024?
With the bullish divergence at play, Cardano’s recovery rally will likely pick up pace next week. Thus, the chances of the overhead trendline breakout rally are increasing.
Using the Fibonacci retracement over the correction run, the 50% Fibonacci level at $0.56 is a potential target for a breakout rally. Beyond this, the bullish reversal could complete a rounding bottom reversal with a neckline at a $0.0775 peak.
Hence, the bull run is likely in Cardano with the market recovery, but the uptrend might not reach the $1 mark this quarter. Using the same Fibonacci retracement, the 1.618 Fib level at $1.041 is a potential target this year.