ADA Technical Analysis: Breakout Despite Falling Crypto Market
The company was created by Charles Hoskinson, one of the co-founders of Ethereum and the CEO at IOHK, Cardano is one of the biggest blockchains that successfully implemented a proof-of-stake consensus mechanism. The new consensus uses less power than the proof of work algorithm that Bitcoin is built on.
Cardano announced its highly-anticipated Alonzo update. With it being updated, the platform now supports a variety of crypto-related applications, such as non-fungible tokens (NFTs) as well as smart contracts.
Let us move ahead to read about the Cardano technical analysis.
Past Performance of ADA
The ADA coin price shows a growth of more than 10% in the past 24 hours, resulting in the breakout of the resistance level at $1.5. Moreover, the price action forms a solid bullish engulfing candlestick in the daily chart. The price jump and the 100% growth in the intraday trading volume show a boom in buying pressure.
ADA Technical Analysis
The V-shaped in the ADA coin price gives a bullish breakout of the double bottom pattern indicated in our previous technical analysis. The price retraces to retest the bullish breakout. Therefore, a tail formation near the neckline at $1.5 can be seen shortly.
Crucial EMAs (50, 100, and 200) in the daily chart still maintain a bearish alignment, and the price jump faces rejection from the 200-day EMA. However, the post-retest bull run can bring the potential to rise above it.
The RSI indicator at 63% shows an end in the sharp growth as the slope retracts with the price facing rejection. Nonetheless, the slope remains above the central mark suggesting an increased bullish momentum.
The MACD indicator does a growing MACD line as the gap with the signal line increases. Moreover, the increasing intensity of the bullish histogram indicates a rise in underlying bullishness.
Therefore, the ADA price action and the technical indicators indicate a boom in buying pressure and trend momentum.
Upcoming Trend
The breakout of the double bottom pattern with the boom in buying pressure and trend momentum indicates the start of a bull run. Therefore, a price jump in ADA coin to $2 is possible after retesting the neckline breakout.
The price action suggests upcoming resistance levels at $2 and $2.30. And, in case of a bearish reversal, the price can find support at $1.5 and $1.125.
At press time, the sentiment chart gives a "NEUTRAL" signal for the ADA coin.