Cardano (ADA) has broken out of the short-term descending resistance line and will confirm a bullish reversal with a breakout of the long-term resistance line.
The price of ADA has been falling along with a descending resistance line since its historic peak at $3.10 on September 2. The decline lasted until December 4, bringing the price of ADA to as low as $1.18 (down). 62% since peak).
Recently, ADA started an upward move and reclaimed the $1.45 horizontal area that previously acted as support.
Table of Contents
Cardano Technical Indicators Are Going Up
The MACD is going up and is about to turn into the positive zone. The RSI has crossed the 50 line. These are two signals that ADA is in an uptrend.
However, until ADA manages to break out of the descending resistance line, the trend cannot be considered bullish.
If a breakout occurs, the nearest resistance will be at $1.95.
Short term trend
The six-hour price chart shows that ADA has broken out of a descending resistance line, which has been in place since Nov.
The 1.95 area is even more solid looking at this time frame, as it is not just a horizontal resistance area, it is also a 0.618 Fib retracement resistance.
Therefore, a breakout above this price will lead to a strong bullish momentum.
ADA wave analysis
Cryptocurrency trader @TheTradingHubb analyzed the ADA price chart and commented that ADA has completed its correction and will now turn bullish again.
Both parts of the downtrend (highlighted in the figure below) have a 1:1 ratio, meaning they are of equal length. Therefore, it is more likely that the adjustment is complete.
The first potential resistance is at $1.94, which is also the 0.382 Fib retracement support (white). However, it will be more likely that ADA will rally towards the 0.5 resistance or 0.618 Fib retracement level. So, two potential resistance levels are at $2.16 and $2.38 respectively.