Cardano eyes 36% breakout as ADA prints bullish technical formation

• The ADA/USDT pair broke out of the bull pennant formation due to a buying pressure surge.
• Cardano’s native token has been trading within an Ascending Channel setup since the beginning of 2021.
• ADA looks to meet the upper trendline of the Ascending Channel at $3.5, a 36% upside from current prices.

JAIPUR (Coinchapter.com) – Cardano bulls triggered an ADA rally resulting in the ADA/USDT pair gaining 10% in the last 24 hours. The pair broke out of its bull pennant set up on Monday, backed by increased buying pressure. ADA now looks to top $3.5, which is a 36% upside from current prices.

Related: Cardano eyes a 33% rally ahead as ADA breaks out of a bullish setup

Bullish Technical Setup

A confluence of bullish technical setups confirmed ADA’s upside outlook. Breakout from the bull pennant setup fuelled the same. The ADA/USDT pair’s rally from Aug 10 to Sept 2 formed the flagpole of the pattern. Later, a brief period of downward consolidation followed, spanning two months.

The bearish stagnation paved the way for an upside breakout supported by a surge in buy bids. As a result, ADA retested the $2.4 resistance before yielding to marginal selling pressure. However, this dip will lead to the pair trading with sideways momentum, which will form the launchpad for further rallies.

Since ADA bounced off the bull pennant’s lower trendline, the conditions are now ripe for Cardano’s native blockchain asset to rally towards the upper trendline of the Ascending Channel setup that has dictated its trend since January 2021.

An extrapolation of the rally (after considerations of intermittent corrections) lays out an upside price target of $3.5. The predicted price move seems valid as every correction led to new higher lows for ADA. Hence a similar trend is expected to keep continuing indicating a solid bullish potential for the Cardano token.

Related: Cardano bull pennant eyes 70% ADA price breakout

Cardano’s Correlation With Ethereum

Also, ADA shares a 61% correlation with Ethereum’s native token Ether, as per crypto market tracking website Cryptowatch. That implies that an ETH rally effect will boil down the sixth-largest cryptocurrency by market cap, which macro market observer Raoul Pal corroborated.

“I think almost certainly till March but possibly to the summer, which will give us higher prices and a different cycle structure than we’ve seen before. I could be wrong. I’m not betting the entire ranch on it. But that’s how I think it plays out. And if I’m right about the network adoption, then these other layer-1s like Solana, Terra, Avalanche, Cardano, and some of the others are going to be super explosive.”

said Pal in a recent Real Vision video

Nonetheless, Pal maintained that getting into layer-1 altcoin markets other than Ethereum might prove costly, as they are riskier bets.

“But in a risk-reward basis, they’re riskier. They’re not as deep a network as Ethereum is. Ethereum to me remains the best bet in the world from a risk-adjusted standpoint.”