The cryptocurrency market has kicked off the week with positive momentum as key altcoins flash green after weeks of correction. Amidst this, Cardano (ADA) has staged an impressive comeback, surging over 8% after a recent downturn.
Cardano's Rise After the Dip
Cardano (ADA) has shown a radical recovery after experiencing a 26% correction over the past 30 days. This rebound comes as market sentiment shifts following Bitcoin's dominance and economic uncertainties from global relations.
Broadening Wedge Setup – A Bullish Reversal?
On the daily chart, ADA initially witnessed a 300% rally in November 2024, reaching a local high of $1.32. However, the price has been consolidating within a descending broadening wedge, widely recognized as a potential bullish reversal pattern. During this correction phase, ADA retested the lower boundary at $0.50 and started a rebound from the 200-day moving average (MA), returning to the current level around $0.75. If this trend continues, ADA will soon face its next resistance at the 15-day MA.
Can ADA Rally Above $1?
ADA's recent bounce is an early sign of recovery. However, actual confirmation will occur with a breakout above the 15-day MA and descending wedge resistance. If bulls can propel ADA above $1.00, it could spark a strong rally toward new highs. Otherwise, failure to sustain levels could lead to another retest of the $0.60–$0.65 support zone.
Although the signs are promising, traders should closely watch volume confirmation and MACD crossover to determine the next move.
