- Cardano (ADA) price shows potential for an 11% rally if it can surpass the $0.465 and $0.477 resistance levels, with bullish momentum supported by a positive RSI divergence.
- However, a decline to $0.422 before a recovery attempt remains a cautious scenario for investors, underscoring the importance of key support and resistance levels in ADA’s near-term movement.
Cardano (ADA) price has been a topic of interest for investors and traders, as it hints at a potential bullish movement. The key lies in whether ADA can overcome critical resistance levels and trigger a substantial rally. Let’s explore the scenarios that could unfold for Cardano in the near future.
Key Resistance Levels and Potential Bullish Scenario
Cardano’s price is currently at a critical reversal zone, trading around $0.456. A significant hurdle lies at $0.465. Overcoming this level could initiate an 11% rally. The next key level is the $0.477 swing high; surpassing it would confirm an uptrend and potentially break the bearish market structure, sending ADA towards $0.496 and $0.510.
The Relative Strength Index (RSI) has breached the mean level of 50 on the 4-hour chart for the first time since May 23, indicating a rise in momentum. This bullish divergence suggests that despite a recent lower low in ADA’s price, the underlying momentum is increasing. If momentum sustains above this key barrier, it could favor the bulls and support the anticipated upward movement.
The Bearish Scenario and Crucial Support Levels
While the bullish outlook is promising, investors should also consider a more cautious scenario. Cardano’s price could decline to the $0.422 support level before attempting to revisit the $0.510 mark. Historically, ADA has reversed multiple times around the $0.422 and $0.432 levels, often triggering double-digit gains.
In the event of a bearish move, a retest of $0.432 and $0.422 would be crucial. If ADA sweeps these levels and recovers above $0.432, it would confirm a potential reversal, setting the stage for another attempt at the $0.511 resistance level.
Market Sentiment and Historical Patterns
Market sentiment and historical data also play significant roles in ADA’s price movement. According to Santiment’s Network Realized Profit/Loss (NPL) indicator, there was a massive capitulation event on May 30. These events occur when holders sell at a loss to avoid further declines, creating opportunities for long-term investors to accumulate at discounted prices.
History shows that steep drops in NPL have often preceded significant run-ups in Cardano’s price. If this pattern holds true, ADA could be on the verge of an uptrend, aligning with the forecasted 11% rally.
A Balanced Approach
Cardano’s price movement in the coming days hinges on key resistance and support levels. While a bullish divergence and favorable RSI suggest a potential upward trend, investors should remain cautious and consider the possibility of a decline to the $0.422 support level. By monitoring these critical points, investors can make informed decisions and capitalize on ADA’s next move. Whether the bulls will cooperate remains to be seen, but staying vigilant and prepared for both scenarios will be crucial.
