Cardano Enters Price Discovery Mode Targeting $3
Key Takeaways
- Cardano just made a new all-time high of $2.58.
- If buy orders continue piling up, ADA could rise to $2.87.
- The $2.47 support level must hold for the bullish outlook to be validated.
Cardano has stolen the crypto spotlight breaking its all-time high achieved in May. Now that ADA has entered price discovery mode, a particular technical pattern suggests it has more room to go up.
Cardano Makes New All-Time Highs
Cardano has been on a roll lately as it recently made a new all-time high of $2.58. The so-called “Ethereum Killer” skyrocketed by a whopping 153% over the past month, displacing Binance Coin as the third-largest cryptocurrency by market cap.
The smart contracts launch, scheduled for the network’s Sep. 12 Alonzo update seems to have investors bullish on Cardano. The introduction of smart contracts on the Proof-of-Stake blockchain will allow for the creation of dApps covering use cases like DeFi and NFTs, written in its in-house programming language, Plutus.
From a technical perspective, the impressive upward price action seen in the last 24 hours appears to have derived from the break of a bullish flag on the 12-hour chart. The 54% rally that took place between Aug. 9 and Aug. 14 created the pattern’s flagpole, while the descending channel that developed right after formed the flag.
Further buying pressure could push ADA up by another 11% toward $2.87. This target is determined by measuring the flagpole’s height and adding that distance to the breakout point.
It is worth noting that Cardano must hold above the $2.47 support level for the bullish outlook to be validated. A sudden increase in profit-taking that pushes ADA below this critical demand barrier could lead to a steep correction.
Based on the Fibonacci retracement level (measured from May 16 high of $2.47 to May 19 low of $1), a break of the $2.47 support would increase the odds for a downswing to $2.15 or even $1.90.
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