Despite a falling wedge at play, Cardano eyes a double bottom reversal in a multi-time frame. Will this lead to a breakout run?
As Bitcoin reclaims the $55K mark, the altcoins are gradually gaining momentum this week. A mildly positive weekend limited the bearish intensity of last week, and Cardano is preparing for a bounce back.
Will a reversal in Cardano result in a breakout run to reclaim the $0.40 mark?
Cardano’s Strong Base At $0.312
In the daily chart, the Cardano price action reveals a falling wedge pattern. Currently, the Cardano price takes solid support at the $0.312 baseline. With multiple lower-price rejection candles, Cardano has successfully avoided a closing price below $0.312.
Over the weekend, Cardano’s price saw a notable increase, climbing 3.49% and 3.99% over two days. It is currently trading at $0.341, reflecting an intraday gain of 1.37%. However, the intraday candle shows a higher price rejection, as it has dropped from a 24-hour high of $0.349.
This higher price rejection has pushed Cardano back below the 20-day EMA, which now acts as dynamic resistance. Despite this, the bullish divergence observed in the daily RSI between the double bottom at $0.312 suggests a potential for a bullish reversal.
Essentially, Cardano’s ongoing recovery is testing the overhead resistance trend line. If successful, the price could rise to $0.375, representing a potential upside of 10%.
Cardano Network Activity Hits 6-Month High
Cardano has witnessed a massive surge in the daily active addresses, the highest since March 2024. Historically, such spikes in address activity led to a surge in the token price.
According to recent data from Santiment, ADA recorded 39,451 daily active addresses on September 6, reflecting renewed interest in the network.
With Bitcoin and the broader crypto market poised for a potential rebound, this uptick in activity may signal a robust recovery for Cardano in the coming weeks.
4-Hour Timeframe Supports Broader Picture
In the 4-hour chart, the Cardano Price action reveals a bullish recovery and supports the chances of a bullish recovery. With a double bottom reversal from the $0.313 baseline, the Cardano Price teases a rounding bottom reversal.
Retracing the Fibonacci level over the correction phase last week, the recovery run has surpassed the 23.60% level and is challenging the 38.20% level at $0.346.
On the 4-hour chart, the price has surpassed both the 20 EMA and the 50 EMA, though it is currently facing resistance from the 200-day EMA.
The uptick in the 20-day EMA suggests a strong likelihood of a bullish crossover. Additionally, the DMI indicator shows a positive trend with an increasing VI line and an uptick in the ADX line, signaling that the bullish momentum is building on the 4-hour chart.
If the uptrend continues, Cardano’s price could reach the 61.80% Fibonacci level at $0.366 or even the 100% Fibonacci level at $0.399.
On a more optimistic note, the 1-day chart indicates that the upside potential could extend to $0.422, aligning with the 200-day EMA and the 23.60% Fibonacci level.
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Source: https://thecryptobasic.com/2024/09/09/cardano-targets-0-40-amid-rising-network-activity-and-double-bottom-reversal/?utm_source=rss&utm_medium=rss&utm_campaign=cardano-targets-0-40-amid-rising-network-activity-and-double-bottom-reversal