Cardano (ADA) price has surged 22% over the past seven days, with trading volume reaching $2 billion in the past 24 hours. This strong performance was supported by bullish technical indicators, including a golden cross and a sharp rise in its ADX, reflecting strong trend momentum.
However, ADA’s recent price pullback raises concerns about the sustainability of the uptrend. As the $1.04 support level becomes critical, ADA’s ability to hold above it will determine whether the bullish momentum continues or a potential reversal looms.
ADA ADX confirms strong bullish trend
Between January 1 and 4, Cardano saw a significant increase in its price from $0.85 to $1.06, accompanied by a sharp rise in its ADX from 11.8 to 50.3.
The ADX, or Average Directional Index, measures the strength of a trend on a scale of 0 to 100. Values above 25 indicate a strong trend, while values below 20 suggest weak or absent trend momentum. ADA ADX at 50.3 highlights the presence of a very strong trend, reinforcing the bullish momentum observed during the price surge.
However, despite this strong ADX reading, ADA price has seen a slight pullback recently, raising questions about the sustainability of the uptrend. Although the EMA lines remain bullish, suggesting that the overall trend is still supportive of an upward move, the recent price decline could indicate a pause or a potential consolidation phase.
For Cardano price to maintain its momentum, buyers must reassert their control to push the price higher, otherwise the trend strength signaled by the ADX could weaken if selling pressure increases.
Ichimoku Cloud Indicates Bullish Setup
The Ichimoku cloud chart for Cardano shows a bullish pattern following a recent price breakout above the red cloud. The upcoming green cloud, formed by rising Senkou Span A and Senkou Span B, indicates continued bullish sentiment, suggesting further upside potential if the current trend continues.
Additionally, the blue Tenkan-sen (conversion line) remains above the orange Kijun-sen (reference line), confirming short-term momentum exceeding the long-term trend.
However, the recent pullback in prices from their highs could signal a period of consolidation or a reduction in buying pressure. For ADA to maintain its bullish momentum, it must hold above the support provided by the cloud and Kijun-sen. A break below these levels could indicate a potential reversal or further retracement.1
ADA Price Prediction: Support at $1.04 is Fundamental
Cardano price formed a golden cross on January 3, with its short-term EMA line rising above the long-term lines – a bullish signal that often precedes bullish momentum. If this momentum persists, ADA price could rise to test resistance at $1.12.
A break above this level could pave the way for further gains, with targets at $1.18 and $1.24 representing potential growth of 16.9%.
However, although the EMA lines remain bullish, recent price action suggests that ADA price could face a pullback. If the $1.04 support level fails to hold, ADA could experience a trend reversal, pushing the price towards $0.949. Further decline could be seen if ADA tests the $0.85 level.
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