Cardano (ADA) shows a bullish falling wedge pattern, signaling a potential breakout and a lucrative trading opportunity.
The cryptocurrency market is experiencing a revival, with renewed investor interest driving altcoins like Cardano (ADA) to recover from recent losses.
A detailed analysis by “S_CAPITAL” on TradingView reveals a potentially lucrative opportunity for traders. His daily chart for ADA highlights key technical patterns and metrics that suggest a bullish outlook.
Cardano Falling Wedge Pattern Signals Reversal
The ADA chart, which was based on the 24-hour time frame by the analyst, highlights a bullish pattern. This pattern is characterized by two converging trendlines that slope downwards, typically signaling a potential bullish reversal.
According to the analyst, as ADA’s price pattern narrows, a breakout to the upside is imminent. He stressed that such patterns have a high success rate historically, making this setup particularly attractive for traders.
Strong support levels bolster this bullish outlook. The analyst noted that ADA has consistently found support in the $0.35 range, bouncing off these levels multiple times.
Notably, the analyst identified favorable entry points for Cardano at $0.4063, with a stop loss below $0.3096 to limit downside risk. The chart also displays a risk/reward ratio of 3.11, indicating that the potential reward is more than three times the risk involved.
Accordingly, the trader targets the $0.72 price point following a successful breakout rally. This represents a potential upside of approximately 76.10% from the current levels.
Further confirming an incoming rally for Cardano is the relative strength index (RSI) at the bottom of the chart, which shows a bullish divergence. The RSI has been trending upwards despite the price moving downwards, suggesting that the selling pressure is weakening. This divergence is often a precursor to a price reversal, adding further weight to the bullish outlook.
Whale Activity Bolsters Bullish Sentiment
Cardano has recently experienced a remarkable surge in inflows, showing that large holders are accumulating. According to data from IntoTheBlock, whale addresses saw an inflow of 5.14 billion ADA, valued at $2.1 billion, on July 22. This influx represents a 10,878% increase from the day before.
Over the past week, inflows to large holders’ wallets have surged by 22,768%, and the past month has seen a 172,952% rise. This dramatic rise in large holder inflows is largely attributed to a concentrated accumulation effort by whale investors.
During this press, Cardano sells for $0.3902, experiencing a 6.82% decline in the last 24 hours and an 11.54% decline over the past seven days.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
