Cardano (ADA) Breakout: Is a 24% Price Increase on the Horizon?

6 months ago 8

ARTICLE AD BOX

Cardano (ADA) price is making an attempt to regain the profits it lost in the past month during the drawdown.

With the support of the market and investors, ADA can likely break out of the falling wedge and rise.

Cardano Has Room for Growth

Cardano’s price is currently in a downtrend, with various attempts at recovery failing in the past month. This is largely due to the broader market cues, which have been relatively bearish. However, this will likely change with the Bitcoin halving event right around the corner.

Signs of the same are visible as ADA holders’ convictions in the past two weeks have been significantly stronger than throughout Q1. Mean Coin Age, which represents the average age of all coins in circulation for a cryptocurrency, is noting an uptick.

This indicator provides insights into the network’s activity level and hodling behavior. Incline suggests HODLing, and decline hints at the movement of assets between addresses. Throughout Q1, this indicator rose by merely 6.6%, whereas in just the last two weeks, MCA has risen by 2.4%.

Thus, conviction at the moment is much stronger than previously.

Additionally, the rally will likely bring profits to the ADA supply, which has been experiencing losses for a while now. About 50% of all circulating ADA is bearing losses, which means significant room for growth.

Generally, more than 95% of the supply in profit is considered to trigger a market top. Since Cardano is far from witnessing such profits, a market top is also far from forming.

ADA Price Prediction: A Breakout is Likely

Cardano’s price is trading at $0.46 at the time of writing. The altcoin has been moving in a descending wedge for over a month. Also known as a falling wedge, this bullish chart pattern is characterized by converging trend lines sloping downward, signaling a potential downtrend reversal.

A breakout is often anticipated to the upside as the pattern progresses, indicating a possible bullish momentum shift.

Such is the condition with ADA, given that the altcoin has successfully bounced off the lower trend line. According to the pattern, a retest of the upper trend line and the potential breach will mark a breakout, resulting in a 24.8% rally to $0.66.

However, if the lower trend line is broken and Cardano’s price falls below $0.40 or fails to exceed $0.50, it could invalidate the bullish thesis. Consequently, ADA would end up falling to $0.35.

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