The Price of Cardano (ADA) Forms Bullish Triple Bottom Pattern
The price of Cardano (ADA) has recently formed a bullish triple bottom pattern, indicating a potential trend reversal. However, despite the pattern formation, ADA has failed to initiate any upward movement.
Technical Analysis and Triple Bottom Pattern
Looking at the daily timeframe, ADA’s price has been declining since reaching its yearly high of $0.46 in April. The cryptocurrency experienced a bounce after reaching a low of $0.22 on June 10, validating the $0.24 area as support. Subsequently, ADA fell twice to the $0.24 horizontal support area on August 17 and September 11, creating a triple bottom pattern.
RSI Indicator Supports Price Increase
Although ADA has not seen any upward movement following the triple bottom pattern formation, the daily Relative Strength Index (RSI) suggests a potential price increase. Traders use the RSI as a momentum indicator to determine market conditions and make trading decisions. The RSI for ADA has shown bullish divergence throughout the triple bottom pattern, indicating a possible trend reversal.
Potential Short-Term Breakout and Price Prediction
An analysis of ADA’s recent movement reveals that it broke out from a descending resistance trendline on September 15. While the price has not yet increased significantly, it is possible that ADA is validating the resistance trendline as support, which often occurs after breakouts. The most likely future price movement for ADA is an increase towards at least the $0.31 resistance area, which is also the 0.5 Fib retracement resistance level.
Invalidation of Patterns and Potential Price Drop
If ADA falls below the $0.24 horizontal support area, it will invalidate both the long-term triple bottom pattern and the short-term bullish pattern. In this case, a 20% drop to $0.20 is likely.
Hot Take: ADA’s Price Potential
While ADA has formed a bullish triple bottom pattern, it has yet to see any significant price increase. The RSI indicator suggests the possibility of a trend reversal, but ADA needs to reclaim the $0.31 resistance area to confirm the pattern. If ADA fails to do so and falls below the $0.24 support area, a further price drop may occur. It remains to be seen whether ADA will experience a bullish trend reversal or continue its downward trajectory.
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