Cardano (ADA) has broken through long- and short-term horizontal resistance levels, confirming a potential bullish reversal
ADA is the native token of the Cardano blockchain platform created by Charles Hoskinson.
As the results of the technical analysis of the daily chart show, the outlook for the coin is distinctly bullish.. Three factors speak in favor of this.
First, on March 30, the price made a bullish breakout of the descending resistance line, which was present on the chart for 325 days..
Breakouts of such long-term structures usually cause a significant increase in prices.
Secondly, this bullish breakout was preceded by a similar bullish breakout by the daily RSI of the bearish divergence trend line (green line).
Typically, bullish RSI breakouts are the harbinger of price breakouts, which is what happened with the ADA.. The RSI is now holding above the 50 mark, supporting continued gains.
And finally, the price recovered above the $0.425 resistance area.
As a result, all signs point to the market further development of growth towards the next resistance of $0.520.
A daily close below $0.425 would reverse this bullish outlook and could see the ADA drop to $0.360. Weekly chart pattern supports shorter-term daily time frame signals.
Here you can see that in January the token broke through the descending resistance line built from the all-time high made in August 2021.. This is a very positive price signal.
In March 2023, price tested this level as support (green icon) and formed a rising low.
In addition, last week the ADA price made a bullish breakout of the $0.425 long-term horizontal resistance area, which coincides with the resistance on the short-term chart.
This move was accompanied by an RSI rise above 50.
This whole technical picture supports a further upside scenario towards the next $0.570 resistance..
This forecast will be neutralized in case of a weekly close below $0.425, which could trigger a drop in ADA to $0.320.
Thus, the most likely scenario for the ADA rate is for the coin to rise to the next resistance level at $0.525, and possibly even to $0.565.
Meanwhile, a close below $0.425 will reverse this bullish outlook. In this case, a price decrease to $0.320 is likely.