An analysis has highlighted two major reasons why Cardano is poised to target higher prices from the current market level.

Cardano has rallied over 23% YTD, spurred by a broader market resurgence. Despite this, a January 6 TradingView analysis from a pseudonymous market commentator suggests the coin could see higher prices.

Cardano Holds Channel Support

Notably, one of the reasons for this bias is ADA’s firm grip of a channel support on the daily chart. The analysis highlighted that the cryptocurrency has formed a base at a multi-month demand zone around $0.35.

Cardano visited this area in December, but buying pressure from the region cushioned weak price action. Consequently, it bounced from this region to a high of $0.43 this week before a slight correction.

In a broader context, an accompanying chart shows that ADA broke below an ascending channel in November 2025, as the market turned bearish from August 2025 onward. While the asset broke below the lower support trendline, the multi-month support just below the zone has held, with multiple bullish reversal signals pointing to a bounce to much higher prices.

ADA to Grab the Liquidity Above the Current Price

Furthermore, the analyst identified a liquidity cluster above the current market price. Usually, these clusters are price magnets, and whales push an asset to grab them before subsequent moves.

The analyst expects nothing different from Cardano, predicting that it will rally further to claim these visible liquidity pockets ahead. Interestingly, he identified these areas in his analysis and highlighted what would invalidate a possible uptrend to attain them.

Cardano Take-Profit Areas

First, he placed his entry between $0.34 and $0.37. At the time of writing, ADA has moved past these areas, changing hands at $0.41.

His first take-profit target is $0.44, which he identified as the first supply zone. His second and third TP areas are $0.50 to $0.55 and $0.60 to $0.65. He called the former a liquidity shelf and the latter the “small sell order” region.

Finally, he highlighted the $0.73-$0.78 range as the maximum target. The supply zone, identified as the golden Fibonacci level, represents a 78% and 90% increase from the current market price.

However, the market analyst emphasized that a drop to $0.245 invalidates this move. The stop loss aligns with a break below the channel’s structural lows.

Bitcoin and Ethereum Must Stay Stable

Notably, the analyst also hinged this rally on the stability of Bitcoin and Ethereum, the two largest cryptocurrencies by market cap. A sharp downtrend in these assets could undermine the potential bullishness in ADA.

Cardano would also benefit from the liquidity rotation to layer 1 tokens. Notably, most altcoins have outperformed BTC recently, and the market commentator suggests investors would switch towards large-cap coins for better gains rather than hold BTC.

Cardano appears to be setting up for a move similar to XRP recent breakout, which could propel its price toward the $0.60 level.

For context, XRP reclaimed its weekly mid-Bollinger Band this week after recording steady gains over the first six days of the year. The token surged more than 30% from its $1.84 opening price, reaching around $2.43. This level aligns with its weekly mid-band, which corresponds to the 20-week simple moving average.

Before this bullish breakout, XRP had remained stuck below the weekly Bollinger midline. During that period, the market largely overlooked the token, which traded near the lower band amid lingering uncertainty. 

Possible Action If Cardano Follows XRP Playbook 

Interestingly, Cardano now appears to be in a near-identical position to XRP before its upward move. At its current price of $0.4198, ADA trades roughly 30% below its weekly midband, which sits near $0.60. 

Notably, its broader technical structure closely mirrors XRP’s earlier setup, including a prolonged weekly downtrend, a rebound from the lower Bollinger Band, and early signs of re-entering the trading channel. 

If ADA follows XRP’s trajectory, a move back toward the mid-band could lift the token to approximately $0.5986, representing a gain of more than 40% from current levels. Such a rally could unfold quickly, as mid-band reversion moves often attract momentum traders as confidence returns. 

Meanwhile, Cardano has already delivered an impressive performance this week. ADA rallied to $0.4357 yesterday, marking a 30.91% jump from its 2026 opening price of $0.3328.

Although the token has since pulled back below $0.42, the move still produced Cardano’s first green weekly candle in several months, reinforcing the improving short-term outlook. 

Potential Next Move

While the technical structure supports a strong upside move, execution remains the key uncertainty. The psychological $0.50 level could attract renewed buying interest, while a move above $0.525 may act as the trigger for ADA’s next impulse wave. 

Although XRP’s decisive breakout has provided a clear roadmap, Cardano must still prove it can follow through. 

Positive Start 

Meanwhile, the year has started on a good note for ADA. The recent price spike helped the cryptocurrency record its first golden cross of 2026, a development that has already fueled speculation about further upside.

Moreover, Cardano founder Charles Hoskinson remains bullish on ADA’s outlook this year. He believes the token could replicate some of its strongest historical performances in 2026.

Further, Hoskinson highlighted several upcoming developments, including the launch of Leios, the Midnight mainnet, and continued improvements to Cardano’s DeFi ecosystem. These efforts could further support the token’s growth this year.