Cardano Designing Bull Cycle...Will it Bottom Out at $0.1 and Rise?

▲ Cardano (ADA)

Cardano (ADA) is consolidating its bottom within a long-term downtrend channel, accumulating energy for the next bull cycle.

According to a report by the cryptocurrency media outlet The Crypto Basic on April 21st, citing data from the analysis platform TradingShot, ADA has entered the second phase of a multi-year downtrend. The report states that ADA has been in a downtrend since its all-time high of $3.10 recorded in 2021. It is currently trading around $0.249, approximately 75.5% down from its recent high of $1.02. Analysts pointed out that the current trend shows a very similar pattern to the first downtrend cycle in June 2022.

Historical data shows that a strong rebound for ADA began when it had fallen approximately 92.3% from its peak. During the 2022 decline, after bottoming out at $0.239, it surged 452% to $1.32. If the same pattern repeats in the ongoing second downtrend cycle, the ADA price could potentially fall to around $0.10 by the end of the year. Experts have defined this range as the optimal long-term buying zone for the next bull market. $0.10 is a further 59.8% drop from the current price.

A bullish divergence, a positive signal, has been observed in the weekly Relative Strength Index, a technical indicator. While the price is making lower lows, the indicator is making higher lows. In 2022, a similar divergence occurred, followed by a significant price recovery. TradingShot predicts that if past patterns are replicated, ADA will begin to rebound around $0.10 and reclaim $0.245 in the short term. Subsequently, a scenario of testing the upper resistance line of the downtrend channel at $0.70 is likely.

If ADA completely breaks out of this downtrend channel, it is expected to record an explosive surge in the next bull market. Analysts predict that the energy generated by the breakout will be substantial, given the long period of consolidation. While the current downtrend is painful, it could be an opportunity for long-term investors to buy at a low price.

However, if the $0.10 support level breaks, there is a risk that the downtrend period could be longer than expected. The market is now watching to see if ADA can write a new comeback story similar to 2022.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*