Analysts: If Cardano Breaks $1.30 Level, It Could Rally To $2.00
Cardano ADA price remains dormant, but as it moves closer to the apex of a consolidation pattern, the chances for an explosive price move increase.
ADA Price Prepares For Volatility
Majority of crypto assets are enduring a consolidation period that will likely end up in a substantial price movement.
For Cardano’s native token ADA, the ongoing stagnation phase could lead to a 59.50% breakout in either direction. Such an ambiguous outlook is determined by the formation of a descending triangle on its daily chart.
This technical pattern came to exist due to the price action that ADA has seen since it reached an all-time high of $2.47 in mid-May. A series of lower highs created the triangle’s hypotenuse while its x-axis formed around $1.00, where most of the swing lows were capped.
ADA should break through the overhead resistance at $1.30 or the underlying support at $1.00 to confirm the direction of its trend. Given the importance of these price points, investors should wait for a decisive candlestick above this area to avoid any potential risks.
Pushing through the supply barrier at $1.30 could see the fourth-largest cryptocurrency by market cap head towards $2.00.
On the other hand, if sell orders pile up, leading to dropping below the $1.00 demand wall, Cardano would likely resume its downtrend to $0.40.
Source: TradingView
ADA’s transaction history shows a similar outlook. Based on IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model, the most significant concentration of underwater positions sits at $1.33. Here, roughly 275,000 addresses have previously purchased more than 4.5 million ADA.
These investors will likely try to break even in their long positions as prices rise, making it difficult for Cardano’s native token to experience a bullish breakout.
However, the IOMAP model also reveals that the most crucial demand barrier below Cardano’s price lies between $1.07 and $1.14. Approximately 102,000 addresses bought 2.15 billion ADA around this price level.
A large number of addresses would be “Out of the Money” in the event of a downswing that pushes Cardano below this price point. These market conditions would likely increase the chances for these investors to exit their positions at the market value, pushing prices further down.
The IOMAP shows that the demand zone at $0.36 would likely keep ADA at bay if this were to happen.
