Cardano has surged by more than 48% in the last 24 hours. The rally occurred in spite of the lethargic upward price action in the market, coupled with the broad-based declines at the beginning of the week. The potentially massive breakout eyes a new all-time high at $1.6.
The 4-hour chart brings to light the formation of a descending triangle. This pattern usually has a bearish bias in technical analysis. However, there are instances when it leads to a bullish breakout.
A breakout occurs after a consolidation period, but it begins when the price slices through the upper trendline (connecting a series of lower highs). Triangle patterns are known to have exact targets, which makes them easy to trade.
For instance, following Cardano’s breakout, the upward target is set at $1.6 and will be achieved after a 48% upswing. Meanwhile, Cardano faces some resistance at $1.27, which has seen the price make a minor retreat to $1.2. Higher support, preferably at $1.2, is needed to secure the rest of the journey to $1.6.
It is essential to note that the bullish outlook has been validated by the Moving Average Convergence Divergence (MACD). The trend momentum indicator has crossed into the positive region, suggesting that the least resistance path is upward. Besides, the MACD line leads the way above the signal line, which is another bullish signal.
ADA/USD 4-hour chart
On the downside, a correction will come into play if ADA fails to secure support above $1.2. The 100 Simple Moving Average (SMA) is in line to anchor the price at $1.14. If losses extend, the 50 SMA currently at $1.1 will prevent the bearish leg from sliding under $1.
Cardano intraday levels
Spot rate: $1.22
Relative change: -0.0228
Percentage change: -1.8%
Trend: Bullish
Volatility: Expanding
