Recent volatility in Cardano price led to a drop of over 3.30% in a day. ADA needs to break through significant resistance barriers to sustain positive momentum.
Breakout Above $1.14 and Its Implications
Technical indicators suggest ADA could initiate a prolonged bullish run if traders surpass the key resistance level at $1.14. Crypto analyst Ali Martinez noted the right-angled descending broadening wedge pattern on ADA chart, indicating a bullish signal for a possible breakout. A successful $1.14 resistance breakout with substantial buying volume could drive ADA to subsequent target at $2. Overall market sentiment and increasing institutional interest create favorable conditions for this outlook.
Trump's Crypto Stockpile Plan
Cardano benefits from recent positive trends within the cryptocurrency sector. Reports indicate former U.S. President Donald Trump is accumulating significant crypto stockpile, sparking discussions about regulatory shifts that could be beneficial for the industry. Additionally, the U.S. Securities and Exchange Commission (SEC) has acknowledged Grayscale's application for a Spot Cardano ETF, marking progress in the regulatory framework, although it does not imply formal approval. A successful ETF approval would boost institutional investment in Cardano, increasing its market value.
MACD and RSI Show Weakening Bullish Momentum
The current ADA price trend presents contradictory signals from technical indicators. The MACD indicates a bearish crossover as its bars decline, signaling weakening buying momentum. A sustained downward trend of MACD lines could suggest short-term bearish conditions despite their current positive status. On the other hand, the Relative Strength Index (RSI) indicates weakening bullish momentum. Momentum appears to weaken as RSI moves toward the 50 zone. ADA faces the risk of further price drops before it starts recovering unless sell pressure intensifies. Market participants are observing support levels for clues that could indicate a market reversal.
Currently, Cardano is trading at $0.7814 following a 2.39% decrease the previous day. If bearish momentum continues, ADA could retest its immediate support at $0.735. The top altcoin remains confined within the price region between $0.62 at the 50% Fibonacci retracement level and the $1.20 supply zone. A strong weekend rally drove the market up by 72%, but prices moved sideways afterward. The inability to maintain higher levels suggests a potential market correction before further gains occur.
