Cardano (ADA) Breaks Bearish Trend, Price Moves Towards $0.7

Cardano (ADA) has recently shown signs of breaking out of a prolonged bearish trend, with its price moving towards $0.7. This development comes after weeks of constrained price action and consistently lower highs, as noted by crypto trader TehThomas on the TradingView platform. The analysis indicates that ADA has broken out on the 4-hour chart, which could signal the beginning of a more significant trend reversal.

Throughout March, Cardano, along with the rest of the crypto market, experienced a bearish trend. The intensity of this bearishness was such that it saw the altcoin go from hoping to break above $1 in the first few days of March to the bulls working to prevent a close below $0.65 at the end of the month. Despite this decline, Cardano’s price action held up better than most large market-cap cryptocurrencies. Technical analysis shows that Cardano’s price action in the last week of March played out in a descending channel formation, as highlighted by crypto analyst TehThomas.

According to the technical analysis, which examined Cardano’s price action on the 4-hour candlestick timeframe, the descending channel that confined Cardano’s price for the past several days was eventually breached in the first few days of April. This allowed the asset to snap out of its minor corrective structure. Although limited to the 4-hour timeframe, this development could prove significant in shaping ADA’s trajectory through April. If the momentum holds, more traders may start positioning for a continuation toward higher resistance levels above $0.7 that was easily broken in recent weeks.

The next challenge for Cardano lies in reaching a zone that combines two significant technical features: the golden pocket and a Fair Value Gap (FVG). The golden pocket, located between the 0.618 and 0.65 Fibonacci retracement levels, is commonly seen as a strong resistance zone, especially following a breakout. In the case of Cardano, TehThomas identified the golden pocket lying around $0.72. This level could pose a resistance for any uptrend above $0.70.

The $0.72 region is also highlighted by a Fair Value Gap (FVG), created by the quick price fall in March that left behind an unbalanced area on the chart. According to TehThomas, price tends to revisit these imbalances to “fill” them, making this confluence a magnet for short-term action. Liquidity will likely be clustered here as well, meaning that Cardano could face some volatility as it approaches it. If bulls can break through this zone with conviction, it could open the path to above $0.7. However, if the price stalls or rejects, the cryptocurrency may pull back to retest the breakout point at $0.65 before attempting another push. Interestingly, this has been the case in the past 24 hours.