The price of Cardano (ADA) has recently experienced a bullish breakout, surpassing a short-term descending resistance line. Now, the token is facing a longer-term horizontal resistance that has been holding for almost three months.
Looking at the weekly timeframe, Cardano’s price has been steadily rising since October, reaching a high of $0.68 in December 2023, marking a new yearly high. However, despite this upward move, ADA has been unable to break through the long-term horizontal resistance area. Instead, the price has formed five consecutive long upper wicks, indicating selling pressure.
After a month-long decline, the token has found support and is attempting to break through the long-term resistance area once again. The weekly Relative Strength Index (RSI) is bullish, above the neutral level of 50 and approaching the 70 mark, suggesting an uptrend.
According to traders and analysts on Platform X, there is optimism about Cardano’s prospects. StakeWithPride mentioned that institutional inflows into ADA in the first six weeks of 2024 were nearly equivalent to the capital inflows for the entire year of 2023. Charles Hoskinson also highlighted the regulatory differences between Ethereum and ADA.
On the daily timeframe, a bullish picture emerges. On February 8, ADA broke through a descending resistance line, supported by a rise in the RSI above 50. Elliott wave analysis suggests that ADA is in the fifth and final wave of a bullish structure that began forming in June 2023. If this analysis holds true, the first potential target for the top is at $0.83, representing a 45% increase from the current price.
However, failing to close above the $0.58 horizontal resistance zone could trigger a 15% drop to the immediate support level at $0.48.
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