Cardano (ADA) is facing a critical test after a strong multi-week rally, with analysts split on whether the token can extend gains or is poised for a deeper pullback.
On-chain analyst Ali Martinez suggested earlier this week that Cardano could be breaking out of a triangular consolidation pattern, “eyeing $1.10” as the next upside target. At the time, ADA was hovering just below the psychological $1 level at $0.97, its highest since March.
However, as volatility returned to the broader crypto market, ADA slipped back to $0.91, prompting Martinez to issue a more cautious update on August 18. Highlighting a “buy signal on Cardano ADA hourly from TD Sequential,” the analyst argued that the token “could be ready to bounce.”
ADA price analysis
At the time of publication, ADA was changing hands at $0.89, down 7.39% in the past 24 hours, underperforming the broader market decline of 3.54%. Still, the token remains up 13.36% on the week, with its market capitalization climbing from $28.59 billion to $31.98 billion, adding over $3 billion in value and securing its position as the 10th-largest cryptocurrency by market worth.
The pullback follows a rapid run-up, with ADA surging 52% over the past 60 days and notching a five-month high of $0.98 last week. Momentum indicators reflected overheating conditions, with the 14-day RSI at 70.55 signaling overbought levels. That triggered widespread profit-taking, compounded by Bitcoin’s 2.6% drop that sparked over $300 million in liquidations across altcoins.
What this means for Cardano
The 24-hour trading volume eased slightly, down 0.52% to $2.08 billion, signaling waning buy-side pressure. On-chain data also shows that an estimated 94% of ADA holders remain in profit, a setup that often coincides with short-term corrections as traders secure gains.
For bulls, the immediate line in the sand sits between $0.89 and $0.90, aligned with the 38.2% Fibonacci retracement level. A sustained break below this support could expose ADA to further downside, potentially retesting the $0.85 region.
Conversely, holding the line could set the stage for another move higher, with $1.10 still within scope if Martinez’s breakout thesis plays out.
Source: https://finbold.com/analyst-sets-cardanos-ada-path-to-1-10/