- Cardano’s 60% correction may set up a bullish reversal above the $1.00 target.
- ADA’s Fibonacci levels and Elliott Wave suggest a strong rebound is forming.
- RSI near oversold, while MACD hints at a potential trend reversal ahead.
Cardano (ADA) has experienced a sharp decline, shedding over 60% from its peak. According to BullishBanter, a crypto analyst, Cardano (ADA) is setting up for a bullish reversal, with strong signals emerging from a critical demand zone.
Analysts are targeting a midterm price level above $1.00, with invalidation levels placed below recent lows. Following a significant 60% correction, Master Ananda remains confident that ADA has the potential for a strong revival. Despite the sharp decline, the formation of a higher low during the correction strengthens the argument for another growth cycle.
$ADA setting up for a solid bullish reversal
— BullishBanter (@bullishbanter01) February 7, 2025
Looking for bullish price action signals at this demand zone
Targeting $1.00+ midterm, invalidation below recent lows https://t.co/DaOcunWDJy pic.twitter.com/uf6T9oEEjS
Cardano Consolidates After Price Drop
Cardano recently hit an all-time high of $0.30 on December 3, 2024, before pulling back significantly. The price is now in a consolidation phase, with many viewing the correction as an opportunity for late entrants. Analysts believe that the worst of the decline is over, and the market is preparing for a brief consolidation before resuming its upward movement.
A key technical factor in ADA’s price action is the Fibonacci retracement levels. The correction briefly dipped below the 0.786 level but closed above the more favorable 0.618 level, suggesting strong support. This structure indicates the potential for a bullish resurgence, aligning with technical indicators pointing towards renewed momentum.
Elliott Wave Theory Supports Bullish Outlook
Master Ananda applied Elliott Wave Theory to assess ADA’s market structure. He explained that the ongoing correction follows a classic ABC pattern, where Wave 2 is a larger-degree correction following Wave 1, which was an upward five-wave impulse. This formation typically precedes a strong continuation move in the same direction as the previous impulse, reinforcing a bullish outlook.
Market Indicators Show Mixed Signals
Despite the bullish outlook, Cardano’s derivatives market presents a mixed picture. As per Coinglass data, Trading volume surged 15.62% to $1.31 billion, indicating heightened market activity.
However, open interest dropped 5.98% to $637.85 million, reflecting a decline in market participation. Additionally, options volume plunged 92.94% to $6.59K, while options open interest saw a minor 0.27% dip to $374.92K.
RSI and MACD Hint at a Potential Reversal
As of press time trading at $0.726853, the Relative Strength Index (RSI) is currently at 30.22, nearing the oversold territory. If buying pressure increases, ADA could see upward momentum. However, failure to surpass 38.35 suggests weak bullish strength.
The Moving Average Convergence Divergence (MACD) remains bearish, with both the MACD line (-0.0676) and Signal line (-0.0419) below zero. However, the histogram indicates weakening bearish momentum, which could signal a trend reversal soon.