NOIDA (CoinChapter.com)—Cardano (ADA) has had a lackluster performance in recent months, trading sideways around the $0.36 mark. Despite this, analysts like Trend Rider see potential for a bullish breakout.
In a recent tweet, Trend Rider highlighted that ADA might be gearing up for a significant rally, drawing comparisons to its historical price patterns that led to massive gains in 2020-2021.
Historical Pattern Might Be Coming Back
Trend Rider’s tweet suggests that ADA’s recent consolidation phase mirrors a past pattern, which preceded a massive 11,194% rally. According to the tweet, the current sideways movement in ADA has been steadily gaining momentum, avoiding lower lows, and could be a sign of an upcoming bullish move.
While this outlook sounds promising, a closer look at the chart reveals key factors to consider.
The previous price action (in the red circle) shows a sharp decline, followed by a prolonged consolidation of 462 days and a subsequent breakout that lasted 1.5 years. This historic pattern is compelling, but a similar scenario today hinges on more than just price structure.
ADA might be building up to a bull run. Source: TradingviewNotably, the current consolidation (406 days) shows significantly lower volume compared to the earlier phase, which could indicate weaker participation from institutional players.
Moreover, while the fractal theory may hold technical merit, external factors like macroeconomic conditions and Cardano’s ecosystem development will play pivotal roles. The broader crypto market faces regulatory pressures and economic uncertainty, which could cap ADA’s upside potential, even if the fractal repeats.
ADA Price Forms Bullish Setup
Meanwhile, the ‘falling wedge pattern,‘ a bullish technical setup, adds to ADA USD pair’s price outlook.
ADA USD price formed a bullish setup with a 132% upside target.Two converging downward trendlines that connect lower highs and lower lows form the falling wedge, a bullish reversal. The narrowing structure shows that, despite the ongoing downtrend, the bearish momentum is gradually weakening, often preceding an upward breakout.
The key feature of a falling wedge is that the slope of the lower trendline is steeper than that of the upper trendline, indicating that selling pressure is dissipating. When the breakout occurs—typically upward—it signals buyers taking control.
To estimate the potential price target after a breakout, traders measure the vertical distance between the widest points of the wedge and project that range from the breakout point upwards.
According to technical analysis rules, the ADA USD conversion rate might rally nearly132% from its current level to reach the pattern’s projected target of around $0.367
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