Cardano’s price action has captured attention as it gears up for another major rally. After an impressive 125% surge following a breakout from a falling wedge, ADA price shows signs of consolidation. This means a potential new ATH is in the works for Cardano.
Despite recent bearish waves from Bitcoin and Ethereum, Cardano’s resilience and technical patterns suggest a bullish outlook. But what exactly is responsible for this predicted bull trend? Let’s find out.
Growing on-chain activity contributes to Cardano surge
In light of the recently completed three-day-long Cardano convention in early December 2024, huge milestones were reached. One of these is the fact that the Cardano blockchain has recently surpassed 100 million successful transactions. ADA’s total value locked (DeFi TVL) also saw a sharp rise when it jumped from $230 million to over $705 million in one month.
According to the DefiLlama data, Liqwid, Minswap, and Indigo are the leading Cardano-based DeFi apps, accounting for more than half of this volume. Currently, the ADA price shows signs of a possible pullback as bullish momentum weakens.
As one of the top 10 tokens in the market, ADA often mirrors Bitcoin, which is struggling to stay above $100K. Ethereum price’s drop below $4,000 is also spreading bearish sentiment across markets, impacting Cardano’s rally. However, ADA has reached levels unseen in years and may still break upper resistance if it holds firm.
Technical analysis
After rejecting its ATH, ADA traded within a large falling wedge before breaking out and rising 125%. Recent patterns suggest bulls are losing steam after driving five straight weeks of gains. Cardano’s price may consolidate for a few days until liquidity returns to the asset.
Current price levels below $1 present an attractive entry point, with analysts predicting a rise above $5 in the next cycle. As the market prepares for its next move, ADA’s trajectory offers promising opportunities for traders and investors looking to capitalize on its momentum.
The weekly chart indicates ADA remains under bearish influence despite its recent rally. Though it gained over 125%, the Gaussian channel still reflects a bearish trend, highlighting potential trading opportunities. A breakout above the channel’s upper bands could signal high volatility, possibly leading to a reversal or correction. This bearish outlook is further supported by RSI divergence.
ADA price prediction insights
ADA’s current pullback might offer a strong entry point at $0.984 or $0.748 if broader market corrections occur. A rebound from these levels could push ADA toward a new ATH, mirroring its behavior before the 2021 bull run. Based on its market charts, it is possible that the next major target could exceed $2.4 based on the Fibonacci indicator, aligning with the 1.618 level.
If this is surpassed, the next target might be $8.30 at the 2.618 level. Most analysts doubt ADA will see double-digit growth in this cycle. While $10 is a long-term goal, surpassing the all-time high and trading above $5 in 2025 seems achievable.
Read more: Ethereum Surges 300% in Key Metric—Is History Repeating Itself?
