Cardano saw a significant increase in its annual high
ADA’s weekly chart indicates a strong upward trend since October. The token is set to form its ninth consecutive bullish weekly candle.
On December 13, Cardano reached a new yearly high of $0.68, the highest it has been since May 2022.
Additionally, the price broke through a long-standing horizontal resistance area that had been in place for 430 days.
Source: TradingView
The weekly relative strength index (RSI) is on the rise and currently above the neutral level of 50, indicating favorable conditions for further growth. It has also entered the overbought zone (green icon).
It is worth noting that in a previous instance, when the RSI entered the overbought area (green vertical line), it preceded a significant price increase that eventually led ADA to reach an all-time high.
ADA Forecast: Can it reach the $1 level?
Based on Elliott wave analysis, the most probable scenario suggests that ADA has reached the peak of the third wave within a five-wave bullish structure (black). The third wave is extended, as shown in white on the chart.
According to SatoshiTalks, the increase in price could be attributed to the rise in the total value of assets locked in the protocol (TVL):
“The #Cardano #DeFi ecosystem has experienced a significant upswing, approaching $450 million TVL. This comes as crypto investors and users are searching for an alternative to #Ethereum. This on-chain growth positively impacted the price of $ADA, leading to an 80% increase.”
There are indications that a local top may be forming, given that the third wave is 2.61 times longer than the first. The completion of subwaves further supports this possibility.
Therefore, if this analysis is accurate, ADA could undergo a corrective fourth wave at the .382 Fibonacci retracement level, around $0.50, which is approximately 20% below the current price.
Source: TradingView
However, if Cardano continues to rise above the 2.61 Fib extension at $0.70, it would indicate the continuation of the third wave. In that case, the price could potentially rise by another 40% and reach the next resistance level at $0.88.
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