As the Cardano (ADA) bull run gains momentum, analysts warn of a pullback as indicators flash a potential short-term correction.
Cardano has experienced a steady rise in recent weeks, reaching the $1.10 mark after a 220% monthly surge. However, sustaining momentum at this level has proven difficult.
Multiple attempts to break past $1.10 were met with rejection, indicating a formidable resistance zone. At press time, the crypto trades at $1.07, reflecting a modest 0.12% gain in the last 24 hours.
Indicators Signal Potential Reversal for Cardano
Technical analysis signals a growing risk of a price correction for Cardano. The appearance of a TD Sequential sell signal on the 3-day chart hints at a possible trend reversal or pullback.
According to analyst Ali Martinez on X, ADA proponents could target $0.88 if the correction occurs. This price point aligns with the Fibonacci 0.786 level, from which a major rebound could follow.
Is Cardano Overbought Yet?
Momentum indicators support concerns over a potential pullback. The Relative Strength Index (RSI), previously in overbought territory above 70, has begun to drop, signaling a weakening of bullish momentum.
Although there’s no clear bearish divergence yet, the RSI decline, coupled with a red candlestick, could signal the start of a reversal.
Meanwhile, the MACD indicator shows the MACD line at 0.1543 and the Signal line at 0.1481, suggesting diminishing momentum. The convergence of these lines raises the possibility of a bearish crossover if the current trend persists.
Cardano Long-Term Potential
Despite near-term resistance, some analysts maintain an optimistic outlook for Cardano. Prominent pundit Dapp Central has described this period as a potential final opportunity for accumulation, citing bullish Bitcoin forecasts by Cardano founder Charles Hoskinson.
Notably, Hoskinson recently forecasted that Bitcoin could reach between $250,000 and $500,000 within 24 months, which is seen as potentially ushering in a significant bull cycle for altcoins, including Cardano.
On the other hand, analyst Lark Davis offers a more ambitious long-term outlook for Cardano. Based on Fibonacci projections, Davis argued ADA could revisit its all-time high of $3.16 during this cycle and even climb to $4.80, $7.70, and ultimately $10.
Davis attributes this growth potential to increasing interest in Cardano’s ecosystem and favorable macroeconomic conditions.