- Cardano formed a bullish triple-bottom pattern at $0.24.
- The RSI indicates a bullish trend with significant divergence.
- ADA aims for a $0.31 resistance zone, but falling below $0.24 could lead to a 30% decline to $0.18.
Cardano (ADA) is currently exhibiting promising signs of a potential trend reversal, underpinned by the emergence of a robust bullish pattern. Since July, ADA has been constructing a triple-bottom pattern centered around the crucial $0.24 support level.
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This triple-bottom pattern, characterized by three distinct price troughs at the same support level, is a widely recognized bullish signal in technical analysis. It signifies a resilient support zone, suggesting buyers defend the $0.24 price mark actively.
Adding to the optimism is the Relative Strength Index (RSI), a momentum indicator traders utilize to gauge overbought or oversold conditions. The RSI for ADA has consistently demonstrated strength, with readings above 50, especially during an upward trend, favoring bullish sentiment. Significantly, during the formation of the triple-bottom pattern, the RSI has displayed notable bullish divergence.
ADA gained momentum when it broke through a descending resistance trendline on September 15. Although the initial rise was gradual, it accelerated in early October, reaching a peak of $0.27 on October 2.
This has ignited hopes for further gains, targeting a minimum of the $0.31 resistance zone. This zone, standing 20% higher than the current price, corresponds to the 0.5 Fibonacci retracement resistance level and a pivotal horizontal resistance area.
Nonetheless, it is essential to exercise caution. A breach of the $0.24 horizontal support could quash these optimistic expectations, potentially leading to a 30% decline to $0.18. While the triple-bottom pattern is encouraging, investors should remain vigilant as the $0.24 support level is pivotal for ADA’s immediate future.
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