Cardano’s native token, ADA, shows strong indications of a possible bullish breakout in the near term, as indicated by a detailed technical analysis of its market structure. The chart highlights a well-defined Elliott Wave pattern, beginning with a five-wave impulse (1-5) followed by an ABC corrective phase. The correction bottomed out near the $0.76 level, forming a robust support base.
From this point, ADA has initiated a new bullish wave cycle, with Wave 1 rallying by approximately 51% to $1.15 and Wave 2 retracing to the $0.87 region, aligning closely with the 0.236 Fibonacci retracement level at $0.89497. The ADA cryptocurrency forms Wave 3 at press time, hinting at an upward price movement.
Another vital feature in the Cardano market structure analysis is the formation of a bullish pennant, a pattern formed by converging trendlines that occurs when a consolidation phase follows a sharp price rise. Typically, once the price breaks out of the pennant formation, this pattern hints at a continuation of the previous uptrend.
With the ADA cryptocurrency nearing the apex of the pennant triangle, a breakout appears imminent in the near term. Moreover, the prevailing trend and strong support structure from the Elliott wave and pennant pattern favor a bullish resolution. However, the possibility of a bearish breakdown below the $0.8947 support zone remains risky.
Cardano (ADA) Key Resistance and Support Levels
According to Cardano’s market structure, the token has a vital support zone marked in green around the $0.90 and $0.82 range, where buyers have consistently stepped in to avoid further downside. This area corresponds with the 0.236 Fibonacci retracement level, reinforcing its importance as a strong floor for the token’s price.
On the upside, the resistance zone around $1.24 and $1.32 zone, which coincides with a 1.0 Fibonacci extension, has been identified as a key barrier. Historically, ADA cryptocurrency has faced selling pressure at this level, making it a critical point to watch.
If the token breaks this resistance, the Fibonacci extension levels at 1.272 ($1.4799) and 1.414 ($1.5597) represent possible bullish targets, suggesting gains of approximately 31% to 59% from current levels. However, in a bearish scenario, a breakdown below the $0.8947 support zone could push the token to revisit the lower support level at $0.76, negating the bullish outlook.
On-Chain Metrics Favor Bullish ADA Breakout
On-chain data further reinforces the impending bullish outlook. This is evident as the cryptocurrency’s derivatives volume has surged by almost 30% to the $2.32 billion mark, indicating increasing interest and the possibility for further price appreciation. Liquidation data further validates the growing market momentum.
At press time, short positions liquidated across major exchanges like Binance, OKX, and Bybit amounted to approximately $782,000, compared to only $141,500 in long liquidations.
This imbalance suggests that bearish traders are increasingly forced to exit their positions, potentially fueling upward pressure on ADA’s price as the market tilts bullish.
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