Technical Analysis and Market Entry: Cardano (ADA) – Bullish Flag Breakout Unleashes Buying Potential
- Cardano’s ADA is on the run higher, attempting to break down a big game-changing barrier of resistance.
- ADA/USDT bulls forced a breakout from a bullish flag structure, which invited another wave of buying pressure.
Recent Price Behavior: ADA/USDT
Cardano’s ADA price is enjoying a very strong run to the upside, seen up a big double-digits in the early part of the session on Thursday. The market bulls are maintaining strong upside momentum after being stuck within consolidation mode for some time. Over the last six sessions, ADA/USDT has rallied as much as 60%, moving back to the highest levels seen since the start of April.
The price had initially entered into a strong bullish trend at the start of March, rising from lows of $0.0400. ADA/USDT went on to run up to $0.1000, which hadn’t been seen since September 2018 during a steep bear market. Shortly after these heights were produced, the price began to cool and consolidate.
Bull Flag Breakout
The behavior of the price formed a descending wedge structure, which was also viewed as a bullish flag formation. After the price eased south within the noted pattern from 4th April- 10th May, the market bulls forced a breakout on 11th May. The breach invited a strong wave of buying pressure (technical given the upper acting trend line of resistance being exposed).
Going by the pole length of the flag, equating to around 135% during the bull run from March-April period, another equivalent move may occur. Typically, if playing out to the textbook, upon a flag breakout, the price should move an equal advance to the pole. A technical move, as such described, could see the price rallying up to heights of the $0.12-$0.1300 price range.
In terms of immediate targets, the bulls are now likely targeting a push above the near-term barrier in proximity to the heights of April. The supply can be seen tracking from $0.0875 up to $0.0940, which if broken down could attract another wave of buyers. Further north, the next likely area of interest would be $0.1100, where ADA/USDT consolidated briefly in mid-August ahead of deeper selling.
Buys remain very much attractive given the most recent technical behavior coupled with the strong bullish momentum observed across the market. Should the bulls manage to push for a daily closure above the supply region of $0.0875 up to $0.0940, then this could be an encouraging long confirmation.
However, the price has to settle above and then use it as a new support area, otherwise another rejection could be seen. If ADA/USDT is able to force a daily break and closure above, then look at placing stops just below the zone. Targets areas would be $0.1100, $0.1200 and lastly $0.1300 in the near-term.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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