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Cardano (ADA/USD) Eyes $2.3 High on Bull Triangle Breakout

Cardano (ADA/USD) Eyes $2.3 High on Bull Triangle Breakout
Cardano (ADA/USD) Eyes $2.3 High on Bull Triangle Breakout

Yerevan (CoinChapter.com) — Cardano (ADA/USD) could hit $2.3 in the coming sessions.

The fifth-largest cryptocurrency by market cap now trades inside a Symmetrical Triangle. In general, these Triangle patterns are trend continuation signals, i.e., the ability of an asset to continue in the direction of its previous bias — upside or downside — after a brief consolidation period.

Cardano expects to undergo a bullish breakout move should its price break above the Triangle’s upper trendline with a rise in volumes. Should it happen, the ADA/USD exchange rate would set its upside target at a height equal to the length of its previous uptrend.

Cardano eyes breakout of its Symmetrical Triangle pattern. Source: ADAUSD on TradingView.com
Cardano eyes breakout of its Symmetrical Triangle pattern. Source: ADAUSD on TradingView.com

Assuming that ADA/USD would break out at the Triangle’s apex — the point where the pattern’s upper and lower trendlines converge, the pair’s upside target would be $1.11 higher. That puts the Cardano price en route to $2.31 in the best-case scenario.

Cardano Fundamentals

The token has surged by more than 580 percent this year as Cardano gained an advantage over its top competitor Ethereum.

The latter experienced massive transaction and gas fees issues in the first quarter, leading to cases wherein users paid as much as $50 to send a $5 across the Ethereum network. Projects like Cardano and Binance Smart Chain presented themselves as alternatives, with the value of their native tokens rising alongside owing to heavy speculation.

More tailwinds for ADA/USD came from Cardano’s transition from a federated network managed by its namesake foundation to a community-run protocol via an upgrade called “Shelley.” The update proposes to make Cardano a proof-of-stake protocol that allows users to participate in the transaction validation process either directly by operating a stake pool or indirectly via delegation in exchange for staking rewards.

With fundamentals intact, it appears Cardano would avoid deeper downside retracement. Nevertheless, a potential invalidation of the Triangle pattern would risk crashing ADA/USD to 0.95 in the short-term.

Photo by Rafael Garcin on Unsplash

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Lilit Chichyan

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