Cardano (ADA) Price Breaks Above Downtrend, Setting the Stage for a 40% Rally to $1

Cardano (ADA) price recently broke above a long-term downtrend line, bringing hopes of a big reversal. The altcoin, trading near $0.71 at press time, has risen 3.85%

Cardano (ADA) price recently broke above a long-term downtrend, crucial for the token’s recovery prospects.

Completing this move could see ADA price rally 40% toward $1.082, setting up a healthy recovery from recent lows. However, key support levels must hold to make that rally possible.

Inverted Head And Shoulders For Cardano Price

As highlighted by crypto analyst TapTools, a potential inverted head and shoulders pattern was emerging on the Cardano price chart.

This classic reversal structure suggests that the cryptocurrency could be preparing for a significant upside move. The pattern includes a central “head” at $0.557, flanked by two higher swing lows around $0.682 and $0.557, forming the left and right shoulders.

The downtrend’s critical neckline for this pattern is around $0.762, which also coincides with the 23.60% Fibonacci level from the March 2022 all-time high to the November 2022 low.

The setup would be valid with a confirmed daily close above this level and possibly a breakout toward $1.082. It would be a 40% upside from the current price and mean a healthy recovery for ADA from its recent lows.

Nevertheless, if the ADA price goes below the neckline, it may revisit the $0.686 level of support. Retaining this level will ensure that the new bullish trend persists in the market. Otherwise, the cryptocurrency may continue to fall.

Cardano Price Prediction Highlighted Key Trendline Breakout

Meanwhile, crypto analyst Lucky demonstrated Cardano price crossing a descending trendline, suggesting that there was a change from bearish to bullish conditions.

This breakout, combined with the continuing uptrend, indicates that ADA price could be on the verge of getting into a new accumulation zone.

The next major resistance zone for Cardano price lies between $0.850 and $0.950. As long as this area is cleared, it could confirm the strength of the current uptrend and attract more buyers, potentially driving the price toward the $1.082 target.

In the same way, ADA price has also surged past the 50-day moving average that is associated with long-term trends. This level could still be a strong support to build a sustained move higher. A break below this average may invite more sellers into the market.

Volume And Sentiment Support Bullish Cardano Price

The recent surge in the Cardano price has also been accompanied by rising trading volumes. It is a crucial indicator for testing the strength of bullish reversals.

A decrease in the volume may indicate that the current move is losing steam and could soon reverse. But an increase in the volume is a result of the rising interest of retail traders as well as institutional customers. These conditions help provide the liquidity necessary to support a sustainable uptrend.

An increase in trading volume is usually a good sign for the cryptocurrency as it indicates that more traders are participating in the market and placing trades in the Cardano price direction.

In addition, a recent report supported bullish ADA price predictions, with the altcoin predicted to hit $1.33 if it breaks out of the current flag pattern.

Analysts at Point72, a prominent hedge fund, highlighted a 89% upside potential, provided ADA confirms a breakout above key resistance levels.

The sustained support above $0.70 and rising demand from long-position traders further strengthen the bullish outlook.