Cardano's Price Stabilizes Amid 40% Retrace, Bullish Sentiment Surges

Cardano (ADA) has been experiencing a sideways price movement, maintaining its range for the past 10 days. This stability has been accompanied by growing online sentiment, with some analysts suggesting that a retest of the local resistance could be imminent if the cryptocurrency holds its crucial support zone.

Cardano has retraced 40% from its two-month high of $1.17, dropping to the $0.7 range over the past few weeks. The cryptocurrency saw a significant surge of 80% on March 2 following the announcement of a “Crypto Strategic Reserve” by the US President, which included Cardano. This announcement sent the token to its monthly highs. However, the subsequent executive order establishing a Strategic Bitcoin Reserve and a “Digital Asset Stockpile” caused ADA to drop below the crucial $0.9 level.

Since then, Cardano has been trading within a narrow range of $0.68-$0.75. Despite a brief drop to $0.64 during the March 11 market crash, the cryptocurrency has shown resilience. Online sentiment towards ADA has been positive, fueled by the Securities and Exchange Commission's classification of ADA’s use case as “smart contracts for government services.” This news has pushed bullish sentiment to its highest rate in over four months, with large-scale investors purchasing around 190 million ADA tokens in the past 48 hours.

ADA has been in a downtrend since December 2024, when it hit its 3-year high of $1.32. The February market retraces sent the cryptocurrency’s price below several crucial support zones, with the token hovering between the $0.60-$0.80 price range. Analyst Sjuul from AltCryptoGems noted that Cardano’s most crucial support level is at $0.66, as it could send it to monthly lows. According to the analyst, “That level should hold; otherwise, all this recent price action will result in a distribution phase.”

Sjuul previously affirmed that Cardano’s chart displayed a Power of 3 pattern, signaling that the cryptocurrency was entering the third phase. This pattern divides the price cycle into three phases: accumulation, manipulation, and distribution. In the last phase, a strong price breakout occurs, with momentum building in the direction opposite to the manipulation. Based on this, if ADA lost the $0.66 mark, the token could see a significant price correction.

Meanwhile, a pseudonym trader pointed out that the altcoin shows “a bullish reversal after breaking out of a falling wedge pattern.” Per the post, Cardano could enter a strong uptrend if it maintains its momentum. Nonetheless, ADA must “hold the current support levels and break above the local resistance for confirmation of further bullish continuation” to the $1.22 target. Analyst Ali Martinez noted that ADA trades within a right-angled descending wedge, with the upper trendline at $1.15. He suggested that a daily close above $1.15 would push ADA’s price to the $2 mark, not seen since 2021.