Cardano Price Prediction: Is ADA Ripe for a Breakout to $0.46?

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Cardano price is in the green today as demand for the currency continues to rise. The ADA price is trading at $0.410, which is a few pips below yesterday’s high of $0.4290. Its market capitalisation has jumped to more than $12.4 billion, making it the 6th biggest digital currency in the world.

Cardano news: There’s no major news moving the Cardano price higher. This week, it was revealed that Grayscale Investments had decided to file for a Cardano trust. It will also form another trust for Monero, Cosmos, and EOS in addition to its other well-known trusts of Ethereum and Bitcoin. In theory, this will lead to more demand for Cardano and other currencies.

Another major Cardano news is that the company behind it plans to create its own stablecoin.

Cardano price prediction

Last week, I wrote that the ADA price was ripe for a bullish breakout. I pointed to the bullish pennant that started to form in January. This prediction was correct as the price broke-out to its all-time high of $0.4322.

Looking at the same chart, we see that it has found some resistance. This is expected since the price is at its ATH. Still, there is still a possibility that the price will have a bullish breakout as bulls start targeting the next vital resistance at $0.4500. However, this prediction will be invalidated if it moves back to $0.3500.

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ADA price chart

Cardano Price Prediction: ADA is Extremely Bullish Above $0.4010

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Cardano price has been in an upward momentum in the past 24 hours. ADA price has jumped by more than 4% in the past 24 hours bringing its market cap to more than $10.7 billion. This makes it the 6th biggest digital currency in the world.

Why Cardano price rose: There are two main reasons why the ADA price has jumped in the past few hours. First, it has gained a lot of interest among traders in chat platforms like Discord and Reddit. Together with Dogecoin, the two have become among the most popular assets by traders. The second reason is that, in general, other cryptocurrency prices have been on a strong uptrend in the past 24 hours. Bitcoin, Ethereum, Ripple, Dogecoin, and Stellar have been rallying.

The third reason is technical. Hear me out.

ADA price technical outlook

The daily chart below shows that Stellar has been on a steady uptrend in the past few months. The currency reached an all-time high of $0.4011 on January 16th this year. Since then, it has been in a consolidation mode, whose support is at $0.2786.

This has not been the usual consolidation. It has been, in fact, a bullish pennant pattern whose flag post started at about $0.1280. The triangle parts of the pennant are shown in red.

In technical analysis, a bullish pennant or flag is usually a sign of continuation. It happens when bulls start questioning the strength of the trend. Ultimately, it tends to break-out and continue with the trend. As I noted earlier, before its current pump, Dogecoin was also forming a pennant pattern.

Therefore, while ADA price has moved above the upper side of the pennant, the strength of the rally will be confirmed once it moves above the ATH at $0.4011.

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Cardano price chart

Cardano Price Analysis: ADA looks primed for a 30% move

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Cardano price is bound for high volatility following a long consolidation period.

The bulls seem to be targeting $0.45 while the bears aim for $0.20.

On-chain metrics hint at a stiff supply barrier at $0.35, which seems to favor the bearish outlook.

Cardano price saw a meteoric surge of 200% from late-December 2020 to mid-January 2021. However, the smart contracts token has been stagnant over the past two weeks showing an ambiguous outlook. A potential breakout could see ADA move by roughly 30% in either direction, but on-chain indicators skew with the bears.

Cardano price sits at a make-or-break point

ADA’s consolidation phase is nearing completion as its price trades around the $0.35 level. But, a symmetrical triangle formation indicates that the breakout could happen in either direction.

Since Cardano has not experienced a significant retracement after it entered a 300% bull rally in the last two months, it is reasonable to assume that it sits in overbought territory.

ADA/USD 12-hour chart

The bearish thesis holds when looking at IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model. This on-chain metric shows a massive concentration of underwater investors at $0.354 who are more than likely to sell their holdings to break-even.

Cardano IOMAP

A spike in sell orders that pushes Cardano price below the 50 twelve-hour EMA will likely validate the bearish outlook. The downswing could be followed by further downward pressure sending ADA towards the $0.27 level where the SuperTrend indicator and the 100 twelve-hour EMA converge.

It would be extremely bearish for ADA price to breach this confluence, as it would cause it to drop towards the 200 twelve-hour EMA around the $0.20 level.

Nonetheless, Cardano could avoid further losses if its price heads higher and breaches the critical supply barrier at $0.354, and closes above $0.38. If this were to happen, ADA price will rise by 30% and target $0.47.

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