Cardano (ADA) is showing promising signs of a potential price surge as it consolidates around the $1.10 level. Crypto analyst Ali Charts has identified a bullish pennant formation on ADA’s price chart, suggesting the cryptocurrency might be poised for a significant upward movement.
Technical Analysis Highlights
The bullish pennant pattern observed in Cardano’s price chart is typically a continuation pattern, indicating the possibility of a sustained upward trend. This formation often follows a sharp price increase, characterized by a triangular consolidation phase.
The resistance level for the pennant is approximately $1.11, while the support level hovers near $1.10. If ADA breaks above the upper trendline, the price could target $1.40 in the short term. Analyst Ali Charts even predicts that Cardano’s price could surge to $3, aligning with earlier projections by Dey There, which also highlighted a similar bullish outlook.
Network Activity Boosting Investor Confidence
Beyond technical signals, Cardano’s network activity is also contributing to its bullish sentiment. According to DeFiLlama, the Total Value Locked (TVL) on the Cardano blockchain has reached $595 million, marking a 33% increase since the start of the year.
This rise in TVL reflects growing interest in Cardano’s decentralized finance (DeFi) ecosystem, attracting both retail and institutional investors. On-chain transaction volumes have also climbed, reaching $10.64 million, further highlighting increased activity within the network.
Additionally, over 10,000 new wallets have been added since December 19, pushing the total number to 4.38 million. This influx of new investors underscores the positive market sentiment surrounding Cardano.
Resistance Levels and Future Targets
For Cardano to maintain its bullish momentum, it must break key resistance levels. The immediate resistance, as identified by Donchian Channels, stands at $1.20. Surpassing this level could pave the way for a move toward $1.34, aligning with the 1.618 Fibonacci extension level.
If ADA continues to build momentum, it could even target $7 in the long term. However, failure to hold above the $1.20 level could see the price retest the critical support at $1.00, with a potential decline to $0.92 if selling pressure intensifies.
Technical Indicators
Cardano’s RSI (Relative Strength Index) is currently at 67, reflecting strong buying activity but nearing overbought territory. Meanwhile, the MACD (Moving Average Convergence Divergence) remains in the bullish zone, supporting continued upward pressure.
Conclusion
With a combination of strong technical patterns and increasing network activity, Cardano offers significant growth potential for investors. The rise in TVL, wallet creation, and transaction volumes signals growing confidence in its ecosystem. For the latest updates on Cardano and its price movement, follow Dey There.
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