- Cardano (ADA) has approached a significant technical indicator.
- The head and shoulders pattern has proven to be a reliable trend reversal formation.
- Recent reports have shown a growing interest in Cardano among institutional investors.
Cardano (ADA) is breaking out of a technical indicator that could shortly trigger a significant price surge amidst an improving cryptocurrency market sentiment and rising prices.
Head and Shoulders Pattern Shows 44% Upward Potential for ADA
This technical indicator is the head and shoulders pattern, which suggests that Cardano is in a bullish trend reversal, potentially leading to a breakout of up to 44% and catapulting ADA’s price to $0.60. As of writing, Cardano is trading at $0.44, a 6% increase in the last 24 hours.
ADA/USDT Daily Chart. Source: TradingView
For those unfamiliar with the head and shoulders pattern, it’s a chart formation that predicts a bullish-to-bearish trend reversal, with an inverted pattern signaling a bearish-to-bullish reversal.
This pattern is characterized by a baseline with three peaks, one more prominent than the others, resembling a head and two shoulders. It’s considered one of the most reliable trend reversal patterns.
Cardano (ADA) Breaks Through Sell Wall
ADA’s price has surged past the significant resistance levels, breaking through a “colossal sell wall,” impeding its bullish trend reversal.
The wall, comprised of 3.85 billion tokens sold between $0.40 and $0.42, had been a significant obstacle to ADA’s price movement. The breaking of this level could indicate that Cardano is prepared for a bullish reversal and a potential substantial price hike.
This change in trend is further reinforced by recent reports indicating that Cardano whales have been on a buying spree, purchasing a total of 560 million ADA tokens worth $218 million.
This trend suggests a growing interest in Cardano among institutional investors, which bodes well for the digital asset’s bullish outlook. As a competitor to Ethereum (ETH) and other key market players, Cardano has been steadily gaining traction.
On the Flipside
- While the head and shoulders pattern is generally considered a reliable trend reversal formation, it is not a foolproof indicator and can be subject to false signals.
- The price surge predicted by the pattern may not materialize, as market sentiments can be fickle and unpredictable.
- While the breakout target may be a possibility, it is not a guarantee, as the sentiment in the market has the potential to shift quickly.
Why You Should Care
Confirming the head and shoulders pattern reversal is a significant event in the crypto market, as it is considered one of the most reliable trend reversal formations. With Cardano being one of the leading coins in the industry, its breakout from this pattern could potentially have a ripple effect on the general crypto market
To learn more about the recent accumulation of millions of ADA tokens by Cardano whales, read here:
Cardano Whales Amass $218M in ADA Tokens Over Two Weeks
For an update on the ongoing legal battle between Ripple and the SEC over the fair notice defense, read here:
Ripple Strikes Back at SEC: Do They Have A Strong Defense in Fair Notice Claim?
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