ADA Price Prediction: Analyst Sets Target After July Breakout

Cardano ($ADA) recently flipped its initial $0.16 resistance level into a support zone on the 4-hour chart, trading at $0.1651 at press time. While this structural swap signals bullish momentum, one analyst notes that the Relative Strength Index (RSI) is lagging behind, which may cause the coin to retest its lower resistance ($0.16).

Cardano ($ADA) near-term price prediction

According to Nick Valdez, $ADA’s short-term upside momentum may hit a roadblock as RSI stalls around the mid-40s. Typically, this signals depletion of the buying pressure necessary to drive a vertical price breakout. It could also signal a possible liquidity hunt or a market in need of consolidation when coupled with a price above the support level.

For this reason, Valdez argues that $ADA could drift slightly downward to test the strength of its lower trendline and shake out weak hands. Should buyers step in to defend this lower support, the analyst anticipates a price bounce that would validate the support zone as a new baseline.

Even more, if this defensive structure holds, it could clear the path for a rally towards the upper resistance zone of $0.20 established earlier this month.

Source: X

Recent developments

On July 15, $ADA whale holdings hit a multi-year high, or about 67% of the total circulating supply. While this supports bullish technical patterns, the coin still shows overbought signals and a resultant price stagnation between $0.14 and $0.20 in the past month.

Source: CoinMarketCap

Aside from that, Volvo Group has joined the Cardano Foundation in discussions regarding blockchain utilization in supply chain management.

What to watch for

For now, traders should continuously monitor 4-hour candle closes relative to the trendline. They should also watch out for the RSI line hooking up, which would indicate an influx of buyers, rising demand, and a possible uptrend.

Additionally, the November launch of the Leios upgrade could boost throughput, potentially driving demand for and adoption of $ADA. The market is also anticipating Cardano ETF approvals towards the end of the year.