Cardano set to explode... 20% surge possible upon breaking 200-day moving average

▲ Cardano (ADA)

Cardano (ADA) is increasing the possibility of a price breakout amidst a Moving Average Convergence Divergence (MACD) compression signal. While a clear upward breakout has not yet been confirmed, the convergence of the daily chart's MACD and oversold indicators suggests a potential mid-term trend reversal in the market.

The Crypto Basic reported on May 11 (local time) that market commentator Dan Gambardello spotted a MACD compression pattern in the Cardano chart. Gambardello analyzed that while Cardano has not yet successfully broken out, it is approaching a decisive move, accompanied by the oversold Relative Strength Index (RSI).

According to the article, Cardano is trading at $0.278, and the MACD compression suggests a potential momentum shift in the future. The MACD has formed higher highs and higher lows since November 2025, and the histogram has turned positive, above the zero line. This is interpreted as an early bullish signal, though not a definitive confirmation that the bearish trend has completely ended.

Gambardello believes that current technical indicators do not support a bearish outlook, contrary to negative market sentiment. He explained that the Stochastic Relative Strength Index (Stochastic RSI) is in the oversold zone, similar to instances where this zone formed market bottoms in past cycles. The Relative Strength Index (RSI) is also in the oversold zone, suggesting that Cardano is preparing for a potential move.

However, he cautioned against expecting an immediate surge. He explained that the current trend is closer to the early stages of a potential macro reversal forming on higher timeframes, such as the weekly chart, and such a structure can take time to complete. Gambardello also dismissed the view that established assets like Cardano, Chainlink (LINK), and XRP would lag in this cycle.

A short-term downside possibility was also raised. Gambardello suggested that if bullish momentum is not sustained this week, Cardano could retrace to the mid-$0.20s, potentially falling to around $0.25 within a few days. However, he explained that such a correction is not technically abnormal in a structure where the 20-day Exponential Moving Average (EMA) rises above the 50-day EMA, as a retest of support can occur.

The forecast also suggested that Cardano's breakout could be delayed until mid-May or after late May. Gambardello noted that investor dissatisfaction might grow if Cardano consolidates while other tokens rise by 25-40%, but it is common for different assets to have varying breakout times in an altcoin cycle.

The key short-term target is set at $0.35. This price point aligns with the 200-day moving average, representing an upside potential of over 20% from the current price. However, it was analyzed that if the consolidation period lengthens, this moving average could drop to the early $0.30s before Cardano tests it.

On the weekly chart, the 20-week moving average around $0.28 acts as strong resistance. Above that, the 200-week EMA and 50-week EMA are located in the $0.49-$0.52 range. Gambardello assessed that Cardano needs to break through this range for it to be a true long-term breakout signal, marking the beginning of a stronger upward phase after a prolonged consolidation.

*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.*