Cardano Wedge Pattern Indicates Big Trade Potential for ADA
thecryptobasic.com 25 July 2024 13:59, UTC Cardano (ADA) shows a bullish falling wedge pattern, signaling a potential breakout and a lucrative trading opportunity.
The cryptocurrency market is experiencing a revival, with renewed investor interest driving altcoins like Cardano (ADA) to recover from recent losses.
A detailed analysis by “S_CAPITAL” on TradingView reveals a potentially lucrative opportunity for traders. His daily chart for ADA highlights key technical patterns and metrics that suggest a bullish outlook.
Cardano Falling Wedge Pattern Signals Reversal
The ADA chart, which was based on the 24-hour time frame by the analyst, highlights a bullish pattern. This pattern is characterized by two converging trendlines that slope downwards, typically signaling a potential bullish reversal.
According to the analyst, as ADA’s price pattern narrows, a breakout to the upside is imminent. He stressed that such patterns have a high success rate historically, making this setup particularly attractive for traders.
Strong support levels bolster this bullish outlook. The analyst noted that ADA has consistently found support in the $0.35 range, bouncing off these levels multiple times.
Notably, the analyst identified favorable entry points for Cardano at $0.4063, with a stop loss below $0.3096 to limit downside risk. The chart also displays a risk/reward ratio of 3.11, indicating that the potential reward is more than three times the risk involved.
Accordingly, the trader targets the $0.72 price point following a successful breakout rally. This represents a potential upside of approximately 76.10% from the current levels.
Further confirming an incoming rally for Cardano is the relative strength index (RSI) at the bottom of the chart, which shows a bullish divergence. The RSI has been trending upwards despite the price moving downwards, suggesting that the selling pressure is weakening. This divergence is often a precursor to a price reversal, adding further weight to the bullish outlook.
Whale Activity Bolsters Bullish Sentiment
Cardano has recently experienced a remarkable surge in inflows, showing that large holders are accumulating. According to data from IntoTheBlock, whale addresses saw an inflow of 5.14 billion ADA, valued at $2.1 billion, on July 22. This influx represents a 10,878% increase from the day before.
Over the past week, inflows to large holders’ wallets have surged by 22,768%, and the past month has seen a 172,952% rise. This dramatic rise in large holder inflows is largely attributed to a concentrated accumulation effort by whale investors.
During this press, Cardano sells for $0.3902, experiencing a 6.82% decline in the last 24 hours and an 11.54% decline over the past seven days.
