NOIDA (CoinChapter.com)— Cardano (ADA) has faced significant bearish pressure recently, pulling back to critical support levels. However, a recent tweet has sparked interest, suggesting that Cardano’s (ADA) current structure is closely mirroring Solana’s (SOL) bottoming phase from late 2023 to early 2024.
This comparison hints at a potential Wave 3 rally for Cardano, targeting around $3, similar to Solana’s past performance.
Parallels Between Cardano and Solana’s Bottoming Phases
The tweet from Aug. 23, 2024, highlights how Cardano, after its remarkable 18,000% run during the last bull market, has endured one of the steepest corrections in the crypto space.
This correction in Cardano, though harsh, is eerily mirroring the pattern Solana exhibited during its bottoming process in late 2023. After a deep correction, Solana formed a robust base before initiating a significant Wave 3 rally.
The suggestion here is clear: Cardano might be on the verge of a similar breakout if it follows Solana’s historical price path.
The Elliott Wave analysis in the tweet’s accompanying chart proposes that Cardano could be nearing the end of its corrective Wave 2, setting the stage for an impulsive Wave 3 that could reach around $3. The chart highlights key Fibonacci retracement levels, particularly the 0.786 and 0.886 levels, indicating strong support zones.
If these levels hold, it could trigger a bullish reversal, propelling ADA into its next major wave, much like Solana’s behavior during its recovery phase.
Looking at the weekly chart of Cardano vs Solana, the connection between the two assets becomes even more apparent. The magenta line representing Solana’s price action shows a clear bottoming formation between late 2023 and early 2024.
During this period, Solana stabilized after a significant decline, forming a base that eventually led to its next upward leg. Cardano’s current price action seems to follow a similar trajectory, with its recent consolidation around key support levels mirroring Solana’s bottoming phase.
The Elliott Wave analysis and the weekly chart comparison reinforce the possibility that ADA might replicate Solana’s recovery and might rally to the $3 mark soon.
Another Bullish Cue Coming From A Technical Setup
Meanwhile, the ADA USD pair has another bullish technical setup, the ‘falling wedge,’ keeping buyers warm on cold, bearish nights.
A falling wedge pattern features a pair of converging trend lines connecting lower highs and lower lows, forming a narrowing shape that slopes downward.
The pattern indicates that an asset’s price, while consolidating in a downtrend, is losing bearish momentum and preparing for a potential reversal to the upside. Typically, a breakout occurs upward, in line with the overall trend.
To estimate the price target, traders measure the widest part of the wedge at the beginning and project this distance upward from the breakout point. Moreover, a higher trading volume during the breakout confirms the reversal’s reliability, indicating stronger market conviction and a higher likelihood of success.
According to technical analysis rules, the ADA to USD conversion rate might rally nearly 200% from its current level to reach the pattern’s projected target near $1.05.
