Cardano ($ADA) is showing strong signs of a potential impulse move after the bearish RSI divergence that had previously emerged was invalidated. Traders and investors are closely watching the price action, as key technical indicators suggest a bullish reversal could be underway. Here’s a breakdown of what’s happening with $ADA and where the price might be headed.
Bearish RSI Divergence Was Invalidated
The bearish RSI divergence, which had initially indicated a potential price decline, was recently invalidated. This is an important development, as it removes a key obstacle for bulls and opens up the possibility for a more sustained upward move.
- RSI Divergence Explanation: The bearish RSI divergence occurs when the price makes higher highs, but the Relative Strength Index (RSI) makes lower highs, suggesting weakening momentum. However, the invalidation suggests that the momentum is no longer weakening and is likely to shift towards a bullish trend.
Cardano’s Current Price Action
$ADA has been consolidating in a narrow range but has shown resilience in holding support levels around $0.32. This consolidation pattern is now being watched closely for a breakout, and technical indicators are hinting at a strong potential for an upward move.
Key Support and Resistance Levels to Watch
- Support Level: $0.32 (Strong support zone)
- Resistance Level: $0.40 (Key resistance that $ADA needs to break for further gains)
If $ADA successfully breaks above $0.40, the next target could be as high as $0.45, marking a potential 15-20% upside from current levels.
What’s Driving This Potential Move?
- Improved Market Sentiment: There’s an overall recovery in the cryptocurrency market, with bullish momentum returning to several top altcoins, including $ADA.
- Development and Upgrades: Cardano’s ongoing development, including smart contract improvements and scalability upgrades, is increasing investor confidence.
- Increased Institutional Interest: More institutional players are looking to diversify into Cardano, further boosting demand and price momentum.
Conclusion: Bullish Target on the Horizon?
With the RSI divergence now invalidated, $ADA could be on the cusp of a breakout. The target for the next impulse move is around $0.45, with a potential 15-20% gain for those entering at current price levels.
As always, crypto markets can be volatile, so investors should remain vigilant and manage risk accordingly.
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