Cardano (ADA) Price Could Reach $0.61 With This Pattern Breakout

Key Takeaways

• Cardano’s (ADA) price has created successive higher lows since August.
• ADA has created a bullish inverse head and shoulders pattern.
• Will ADA break out from this pattern, and how long will it increase if so?

2024 has not been kind to the Cardano (ADA) price, which has fallen over 40%. The lowest point of the decline was $0.275, reached on Aug. 5. Nevertheless, ADA has shown promise recently by finally creating a higher low.

Is this the beginning of a longer-term bullish trend, or will ADA falter and create a lower high before declining further? Let’s examine the price action to find out.

Cardano Price Creates Higher Low

The weekly ADA chart shows a decrease since the yearly high of $0.81 in March. The downward movement led to a low of $0.27 in August. During this time, the Cardano price created three lower lows (black icons).

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However, ADA bounced after the low, validating the $0.32 horizontal support area. It then ended the trend of lower lows by creating a higher low in September (white icon). Nevertheless, ADA has not confirmed this reversal since it has not created a higher high.

Technical indicators show a similar story. The Relative Strength Index (RSI) and MACD have begun to increase, but the former is below 50, and the latter has not made a bullish cross yet. If the price increase continues, the indicators could cross their bullish thresholds soon.

So, the weekly time frame shows some bullish signs, but the trend reversal has not yet been confirmed.

Cardano’s Bullish Outlook

The daily time frame chart gives a more decisively bullish outlook because of the wave count and price action. The most likely wave count suggests that ADA completed a five-wave increase starting in June 2023.

Then, it also finished an A-B-C corrective structure (black), culminating with a low of $0.275. If the count is accurate, ADA has started another upward movement.

The price action also supports this possibility. It shows that the price of ADA has been creating an inverse head-and-shoulders pattern since May and is close to completing it. A breakout from the neckline at $0.37 will confirm that the upward movement has started.

The daily RSI and MACD are at their bullish thresholds of 50 and 0, respectively. A breakout from the pattern will likely cause these indicators to move above the levels, confirming that the correction is over.

The first target is $0.61, created by projecting the pattern’s length to the breakout level. It also aligns with the 0.618 FIbonacci retracement resistance level.

However, if ADA has started a new upward movement, it will increase to at least $0.87, giving it the same length as the move that started in June 2023.

Cardano Price Breakout Incoming

The weekly and daily time frame both give a bullish ADA outlook. A breakout from the inverse head and shoulders pattern will confirm the correction is over. While this is likely to take the ADA price to a new yearly high, there is a preliminary resistance at $0.61 before the price of ADA gets there.

About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

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