An analyst has explained that if history repeats for Cardano (ADA), its price could break $8. Here’s when this might happen for the asset.
Cardano Has Been Mirroring Past Price Pattern Recently
In a new post on X, analyst Ali has discussed a potential breakout happening in the weekly price of Cardano. ADA has appeared to have surged above a long parallel consolidation channel in this latest breakout.
Below is the chart shared by the analyst that shows this recent pattern in the price of cryptocurrency.
The pattern that the ADA weekly price has been displaying recently | Source: @ali_charts on X
As the graph shows, ADA had been moving inside a parallel channel until the recent surge toward the upside came. In technical analysis, a “parallel channel” refers to the region enclosed by two parallel trendlines.
This pattern forms when the asset trades sideways inside a specific range. The upper line of the channel can be a source of resistance for the asset; thus, reversals towards the downside can likely take place after retests of it. Similarly, the lower line can be a probable point for bottoms to take form.
However, breaks out of either of these lines imply a potential strong continuation of the trend in that direction. This means an escape above the channel can be a bullish signal for the price, while a drawdown under it can be a bearish predictor.
During 2019-2020, Cardano was also stuck in consolidation inside a parallel channel similar to the one witnessed recently, as Ali highlighted in the chart.
In this previous period, the cryptocurrency had eventually managed to break above the channel, leading to the 2021 bull run. In total, the asset enjoyed a rally of 3,200% back then.
The coin’s trajectory inside the latest channel ended up being similar to that one, and recently, the ADA price has also broken beyond the channel in a fashion that has been reminiscent of the break of the previous one.
After the previous break, the coin rallied for a bit and then returned to retest the upper level of the channel, which has been repeated this time as well.
The difference this time, however, is that Cardano appears to be heading up now, which took a bit more time to happen last time around.
“The Cardano breakout may come earlier than expected!” notes the analyst. “Still, if history repeats itself, we are anticipating ADA to rise to $0.80, retrace to $0.60, and then enter a bull run toward $8 by January 2025!”
If the cryptocurrency follows this path set by history, the rally toward the $8 level would mean a total uplift of more than 1,200% from the coin’s current price.
ADA Price
Cardano has enjoyed a surge of more than 11% in the past week and has risen to the $0.60 mark.
Looks like the price of the coin has been rapidly moving up in the last few days | Source: ADAUSD on TradingView
Featured image from Shutterstock.com, charts from TradingView.com
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