Cardano closed the week at its highest level since 2022: will this help ADA reach $1?

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Cardano closes above long-term resistance

The weekly timeframe shows that the price of ADA has been rising since September 2023. This upward movement culminated in a new yearly high of $0.68 in December.

However, the token did not close above the horizontal resistance area of $0.58. Instead, the price formed six long upper wicks in a row (red icons) and moved below this area. Such wicks are considered signs of selling pressure. However, last week Cardano rallied and closed the week above this area, at its highest level since May 2022.

Source: TradingView

However, despite this positive development, the weekly relative strength index (RSI) has formed a bearish divergence (green line), which often precedes downward movements.

ADA forecast: has the trend become bullish?

Meanwhile, the daily timeframe is giving bullish signals. Here, the price action shows that the cryptocurrency has broken through the descending resistance line and has reclaimed the $0.58 resistance area.. This rise in ADA has been accompanied by the RSI moving above the neutral 50 mark, reinforcing the bullish price breakout.

In a survey conducted by WhaleFUD, 48% of respondents believe that ADA will overtake Ethereum in market capitalization. In addition, the other day Cardano founder Charles Hoskinson made a number of optimistic statements.

Elliott wave analysis is also consistent with current growth. The most likely wave scenario suggests that ADA is in the fifth and final wave of an upward movement. The potential target for the top of this bullish move is located at $0.83, which is 40% higher than the current price.

Source: TradingView

Despite this bullish outlook, a close below $0.58 could trigger a 17% drop in ADA to the nearest support level at $0.50.

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