Cardano returns to breakout levels
The weekly timeframe shows that Cardano finally closed above the long-term horizontal resistance area two weeks ago. Prior to this, the price made five unsuccessful attempts to break through it (red icons), which led to the formation of long upper wicks. They are considered a sign of selling pressure.
After a bullish breakout last week, ADA formed a bearish candle. This week the price returned to the horizontal area, possibly confirming it as support.
Source: TradingView
While price dynamics remain bullish, RSI signals are negative. During the breakout, it formed a bearish divergence that precedes downward movements. However, although the indicator is falling, it is still above the neutral level of 50.
ADA Forecast: Will Price Protect a Bullish Breakout
The daily timeframe confirms the weekly chart signals. It shows that on February 8, the price of Cardano broke through the descending resistance line, and on February 20, it reached a high of $0.64. Although the price has declined since then, it is still trading inside the horizontal support at $0.58.
In addition, Elliott wave analysis also promises the price to continue to grow. The most likely scenario suggests that the token is in the fifth and final wave of an upward movement.
If this calculation is correct, ADA will likely rise another 40% and reach the next resistance at $0.82, completing the fifth wave. After this, a correction is expected.
Source: TradingView
Despite the bullish outlook, a close below $0.58 will deepen the short-term correction. Cardano price could then fall another 10% to the immediate support at $0.52. It is worth noting that this will not cancel the long-term bullish wave scenario, but will only delay the fifth wave of growth.
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