An analyst has explained that based on a pattern forming in the Cardano price, a 32% rally could take place, if a close above this level can happen.
Cardano Has Been Forming A Descending Triangle Pattern Recently
In a new post on X, analyst Ali has talked about a Descending Triangle forming in the daily price of Cardano. The “Descending Triangle” refers to a pattern in technical analysis (TA) that, as its name suggests, looks like a triangle with a downward slope.
The pattern is made up of two lines, the first of which is a slopped line connecting lower highs in the price, while the second one is horizontal (that is, parallel to the time-axis) and joins together a series of lows.
The upper line of the pattern provides resistance to the price, so it can be a likely point of reversal for it. Similarly, the lower line may provide support, so bottoms can be probable at it.
A break out of either of these lines implies the continuation of the trend in that direction. This means that a breakout above the triangle can be bullish for the asset, while a drop under it can prove to be a bearish signal.
Like this pattern, there is also another pattern in TA called the Ascending Triangle. This pattern works similarly, except for the fact that the two lines are switched around (that is, the slopped line is the bottom line and connects together higher lows).
Now, here is the chart shared by Ali that shows the Descending Triangle pattern that has recently been forming for Cardano on its 1-day price:
Looks like the price is currently making a retest of the upper line of the pattern | Source: @ali_charts on X
From the graph, it’s visible that Cardano’s latest sharp upward surge means that cryptocurrency is now retesting the upper line of this Descending Triangle.
If the historical pattern is anything to go by, a break above could be a positive sign for the price. “A sustained daily close above $0.53 could lead to the start of a 32% rally, potentially pushing $ADA up to $0.68!” notes the analyst. Ali has chosen a target 32% higher as the height of the Descending Triangle was equal to a price swing of 32% as well.
Naturally, this bullish outlook would only be if a break can truly take place for the cryptocurrency. A rejection here is still a possibility, as it has already happened a few times over the course of this pattern’s duration.
ADA Price
The past 24 hours have been bullish for the cryptocurrency sector as a whole, but Cardano has clearly pulled ahead of the crowd as it has registered returns of almost 10%.
Following this surge, the coin has managed to break above the $0.53 level. The asset now has to hold above this mark if the Descending Triangle break has to register.
The price of the coin has observed some sharp bullish momentum over the past day | Source: ADAUSD on TradingView
Featured image from Shutterstock.com, charts from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Credit: Source link
