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An analysis has highlighted two major reasons why Cardano is poised to target higher prices from the current market level.
Cardano has rallied over 23% YTD, spurred by a broader market resurgence. Despite this, a January 6 TradingView analysis from a pseudonymous market commentator suggests the coin could see higher prices.
Cardano Holds Channel Support
Notably, one of the reasons for this bias is ADA’s firm grip of a channel support on the daily chart. The analysis highlighted that the cryptocurrency has formed a base at a multi-month demand zone around $0.35.
Cardano visited this area in December, but buying pressure from the region cushioned weak price action. Consequently, it bounced from this region to a high of $0.43 this week before a slight correction.
In a broader context, an accompanying chart shows that ADA broke below an ascending channel in November 2025, as the market turned bearish from August 2025 onward. While the asset broke below the lower support trendline, the multi-month support just below the zone has held, with multiple bullish reversal signals pointing to a bounce to much higher prices.
ADA to Grab the Liquidity Above the Current Price
Furthermore, the analyst identified a liquidity cluster above the current market price. Usually, these clusters are price magnets, and whales push an asset to grab them before subsequent moves.
The analyst expects nothing different from Cardano, predicting that it will rally further to claim these visible liquidity pockets ahead. Interestingly, he identified these areas in his analysis and highlighted what would invalidate a possible uptrend to attain them.
Cardano Take-Profit Areas
First, he placed his entry between $0.34 and $0.37. At the time of writing, ADA has moved past these areas, changing hands at $0.41.
His first take-profit target is $0.44, which he identified as the first supply zone. His second and third TP areas are $0.50 to $0.55 and $0.60 to $0.65. He called the former a liquidity shelf and the latter the “small sell order” region.
Finally, he highlighted the $0.73-$0.78 range as the maximum target. The supply zone, identified as the golden Fibonacci level, represents a 78% and 90% increase from the current market price.
However, the market analyst emphasized that a drop to $0.245 invalidates this move. The stop loss aligns with a break below the channel’s structural lows.
Bitcoin and Ethereum Must Stay Stable
Notably, the analyst also hinged this rally on the stability of Bitcoin and Ethereum, the two largest cryptocurrencies by market cap. A sharp downtrend in these assets could undermine the potential bullishness in ADA.
Cardano would also benefit from the liquidity rotation to layer 1 tokens. Notably, most altcoins have outperformed BTC recently, and the market commentator suggests investors would switch towards large-cap coins for better gains rather than hold BTC.