Cardano (ADA) has a strong and historical bullish signal in its weekly chart during a strong momentum for all cryptocurrencies. This could ignite a massive surge for one of the most popular layer-1 blockchains in the cryptocurrency market.
Notably, Cardano confirmed a breakout of the 50-week exponential moving average (EMA) in the week starting on December 4, 2023. By then, ADA went from $0.4 to $0.6 per token, similar to the May 25, 2020 action.
Previously, ADA broke from the 50-week EMA, moving from $0.05 to $0.07 in seven days. After that, the token traded above the indicator for a 5,580% uptrend to the $3 level in August 2021.
ADA/USD weekly chart. Source: TradingView (Finbold)
Can Cardano surge above $10 in a bull market?
In this context, there is a hypothetical projection of a Cardano surge above $10 if we mirror the previous breakout performance.
On the other hand, 2024 is not 2020, with relevant changes that might prevent a surge above $10. Nevertheless, the market is currently in a strong momentum. Thus, a bull market could still result in impressive gains for ADA investors.
In particular, two notable differences are the Relative Strength Index (RSI) and Cardano’s market cap.
First, the weekly RSI did not correct as much as before, which could weaken the fuel for the following impulse. Second, Cardano’s supply inflation artificially increased the asset’s capitalization, which is already over 10 times higher than before.
These two factors make ADA a heavier asset to pump as much as in 2020-2021.
In summary, the technical analysis indicator suggests Cardano is on the edge of a relevant surge for 2024 and 2025. However, the market and ADA have changed these past four years, facing more competitors. Therefore, future price action is unlikely to mirror past performance, and investors must speculate cautiously.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
