Following a period of hovering below the $1 level, an analyst has identified that Cardano (ADA) may be gearing up for a potential exponential surge based on its technical configuration.
The analysis points to ADA triggering a potent buy signal on its weekly timeframe, aiming for price targets around $5, as highlighted by TradingShot on September 24. Particularly noteworthy is the formation of a bullish cross on Cardano’s one-week Logarithmic Moving Average Convergence Divergence (1W LMACD), a signal not seen since October 2023, indicating a significant shift that could lead to a notable upward movement for ADA.
Furthermore, the analysis indicates that the bullish cross on the 1W LMACD is regarded as a robust long-term buy signal, reminiscent of conditions observed during previous bullish cycles that propelled Cardano to new highs. Additionally, observations of ADA consolidating below its 50-week moving average (1W MA50) since May are seen as a precursor to a breakout, similar to past rally patterns.
On the flip side, the DeFi token’s one-week Relative Strength Index (RSI) exhibiting a range suggests a period of accumulation in the market. The stable RSI implies the potential for ADA to embark on a new rally once buying strength picks up. The bullish megaphone pattern forming alongside the 1W MA50 and MA100 signifies a potential launchpad for Cardano into a parabolic rally, potentially reaching new highs with a $5.00 price target highlighted in this cycle.
In parallel, ADA’s recent positive momentum and breakout from a descending channel have led analysts to project a continued upward trajectory, with a potential target of $1. The ongoing development on the Cardano network, including a surge in smart contracts and the successful completion of key upgrades like the Chang hard fork, is expected to fuel further growth for ADA.
Currently trading at $0.37, Cardano has seen a 5% gain in the last 24 hours and nearly 12% increase on the weekly chart. While the short-term outlook appears bullish with ADA trading above its 50-day SMA of $0.348, it remains below the 200-day SMA of $0.463, indicating a long-term downtrend. To confirm the bullish momentum predicted by experts, ADA would need to surpass the 200-day SMA, signifying a stronger rally, while remaining below it could indicate prolonged consolidation or downward pressure.