Cardano has seen a busy month of June. Not only was the Alonzo testnet making developments towards establishing smart contract applications, but developers also kept a close eye on the NFT marketplace. A recent piece covered Cardano’s game plan when it came to the hotly trending digital asset.
While Cardano’s ecosystem was turning new corners, its native cryptocurrency, ADA, was recovering along with the broader market. A rise of 7% over the last 24 hours saw prices inch closer to the upper trendline of its ascending triangle present at $1.46.
Cardano Daily Chart
Source: ADA/USD, TradingView
Chances of a descending channel breakout (not shown) were explored in a recent article and ADA bulls fully capitalized on this opportunity. Moreover, an upward trajectory from the June 22 swing low of $0.98 led to the formation of an ascending triangle, and the upper trendline represented an overhead resistance of $1.46-1.47. Interestingly, this area also saw some interplay with the 100-MA (blue) and a breakout would open the doors for a gradual recovery towards the all-important $1.88 mark.
Reasoning
Relative Strength Index has been denied a rise above 50-55 since for more than a month now, but bulls would look to break this trend moving forward. A move above 55 would denote shifting market dynamics. MACD had already registered its second bullish crossover since the wider 19 May crypto crash and momentum could accelerate towards the buyers. Directional Movement Index was yet to register a trend switch but the +DI line moved closer to the -DI line and awaited a favorable crossover.
Considering the aforementioned factors, ADA had the potential to break north of the resistance area at $1.46-1.47. Such an outcome could see a short-term push towards $1.65, from where a pickup towards $1.88 was possible over the coming week. Overall, this would represent gains of 30% from the press time price. However, market observers must not rejoice just yet. The next wave of selling pressure could be around the corner and bulls had a small window to enforce a favorable outcome.
Conclusion
Cardano’s market was on the verge of a key breakout, one that could push prices back towards the all-important resistance mark of $1.88. However, there could be limited time to make such a move as another round of selling pressure was not far away.
