Cardano (ADA) Price Eyes Breakout After Crypto Reserve Spike and Pullback

Key Takeaways

• ADA trades inside a long-term range between $0.80 and $1.20.
• The price attempts to break out from a descending parallel channel.
• Has ADA reached its cycle top, or will it surge to new highs in 2025?
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ADA saw a massive boost from Donald Trump’s announcement of a strategic crypto reserve on March 2, soaring over 100% and culminating with a high of $1.17.

However, the price has fallen, invalidating a portion of the increase. This has increased worries that the surge occurred because of short-term hype around the announcement and is not sustainable.

Let’s examine the charts and see what lies ahead.

Cardano’s Long-Term Range

The weekly chart shows that ADA has traded between $0.80 and $1.20 since it first broke out in November 2024.

The price seemingly broke down from the range in February (black circle) but has bounced since, creating a higher low near the end of the month. This took the ADA price to the range high, creating a lower high (red icons).

Currently, ADA trades in the middle of the range. A positive development is that ADA broke out from a descending resistance trend line and could validate it as support. If that is the case, an eventual breakout will be expected.

However, technical indicators are undecided. The Relative Strength Index (RSI) is falling even though it is above 50. The Moving Average Convergence/Divergence (MACD) made a bearish cross but is still positive.

So, the weekly time frame readings are insufficient to predict whether the ADA price will break out.

Failed ADA Price Breakout?

The daily time frame also offers a mixed reading. The decline since the cycle high is contained inside a descending parallel channel, a sign suggesting the drop is corrective.

The channel contained an A-B-C correction (red) in which waves A and C were the same length, further supporting this possibility.

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This scenario seemed confirmed when the price broke out from the channel on March 2, sparked by a bullish divergence in the daily RSI and MACD (orange).

However, ADA failed to break out from the $1.15 resistance area, and the crypto fell back into the channel. While the bounce at the midline (green icon) is a positive sign, the price must leave the channel again for the trend to be bullish.

If that happens, the Cardano price could make another attempt at breaking out above the range high.

Another bearish sign is the overlap between the high of the original bounce and the March. 4 low. If the recovery was a five-wave upward movement, Elliott wave rules state that wave four cannot drop into wave one territory.

Since ADA has done that, it points to the increase being an A-B-C correction instead. If this is the case, the 0.618 Fibonacci retracement resistance at $0.95 will reject the ADA price and trigger a decline. As outlined previously, a breakout from the channel would be a bullish sign pointing to higher prices.

Short-Lived Breakout

Donald Trump’s announcement of a strategic crypto reserve caused the ADA price to double. However, ADA failed to maintain the increase and has fallen back into its corrective channel.

The trend cannot be considered bullish until ADA moves outside this pattern.