The upcoming Shelley launch has been a major booster for Cardano’s [ADA] price movement. The native token has emerged as a “hot altcoin” and is currently one of the best performing crypto assets on the market. At the time of writing, the coin was being traded at $0.0786 and it appears that it might be readying itself for a bull run.
Cardano Daily Chart:
Source: ADA/USD on TradingView
Cardano has followed a strong upward trajectory since the March crash which led to the formation of an ascending channel pattern over a period of two months. A breakout from this pattern could lead to the formation of a potential bearish breakout.
However, the moving averages depicted a positive picture of the coin. The 50 daily moving average [Pink] underwent a golden cross with the 100 daily moving average [Purple] on the 19th of May following a brief rally. The gauge has been expanding since then and there were no signs of a bearish crossover in the near-term.
Source: ADA/USD on TradingView
In addition, even the MACD line was above the signal line depicting a potential bullish trend for the coin.
Case 1:
The placement of the daily moving averages and the MACD indicator provided validity to a potential bullish breakout in the near term. If this trend materializes, ADA could climb to $0.088 and if the trend persists it could also target another point of resistance at $0.1016.
Case 2:
A bearish case though backed by ascending parallel channel formation appeared to be bleak as the coin found support at points $0.066, $0.0515, and $0.036 respectively.
Correlation:
Cardano has outshined almost all other crypto-assets, within the top 20 by market capitalization, by closely following Bitcoin’s price action. According to Coin Metrics’ data, the correlation coefficient for ADA-BTC stood at 0.84. If this continues, Bitcoin’s surge would be able to catapult Cardano to breach significant resistance levels.
Source: Coin Metrics
Conclusion:
The above charts depicted a potential breakout to the positive side. The target points in case of an upside break for ADA stood at $0.088 and $0.1016 as it held its price stood firm at $0.066, $0.0515, and $0.036.
