Cardano, designing a bullish 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 bullish cycle.

Cryptocurrency specialized media The Crypto Basic reported on April 21, citing data from the analysis platform TradingShot, that ADA has entered the second phase of a multi-year downtrend. According to the report, ADA has been on a downward trend 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 began when ADA fell approximately 92.3% from its peak. During the 2022 decline, after finding a bottom at $0.239, it surged by 452% to reach $1.32. If the same pattern repeats in the ongoing second downtrend cycle, the ADA price could potentially drop to the $0.10 level 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 an additional 59.8% drop from the current price.

A positive signal, a bullish divergence, has been detected 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 appeared, after which a full price recovery began. TradingShot predicted that if past patterns are replicated, ADA will start 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 believe that the energy generated by the breakout will be significant due to the prolonged correction period. While the current downturn 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 also a risk that the downtrend period could be longer than expected. The market is now watching to see if ADA can write a new reversal drama like in 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.*