Despite the falling wedge in play, Cardano sees a double bottom reversal on the multi-timeframe. Will this lead to a breakout?
As Bitcoin reclaims the $55K mark, altcoins are slowly gaining momentum this week. A mildly positive weekend has capped last week’s bearish intensity, and Cardano is poised for a rebound.
Will Cardano’s reversal lead to a breakout and recovery above $0.40?
Cardano’s Strong Base at $0.312
On the daily chart, Cardano’s price action shows a falling wedge. Cardano’s price is currently finding solid support at the $0.312 baseline. With several lower price rejection candles, Cardano has successfully avoided closing below $0.312.
Cardano price has seen a significant increase over the weekend, rising 3.49% and 3.99% in two days. It is currently trading at $0.341, reflecting an intraday gain of 1.37%. However, the intraday candle shows a stronger price deviation, as it has fallen from a 24-hour high of $0.349.
This higher price bounce has pushed Cardano back below the 20-day EMA, which now acts as dynamic resistance. Despite this, the bullish divergence seen in the daily RSI between the double bottom at $0.312 suggests potential for a bullish reversal.
Essentially, Cardano’s ongoing recovery is testing the upper trend resistance line. If successful, the price could rise to $0.375, representing a potential upside of 10%.
Cardano Network Activity Reaches 6-Month High
Cardano has seen a sharp increase in the number of daily active addresses, the highest since March 2024. Historically, such spikes in address activity have led to an increase in the token’s price.
According to the latest data from Santiment, ADA registered 39,451 daily active addresses on September 6, reflecting renewed interest in the network.
With Bitcoin and the entire cryptocurrency market poised for a potential recovery, this surge in activity could be a sign of a strong recovery for Cardano in the coming weeks.
The 4-hour time frame supports the bigger picture
On the 4-hour chart, Cardano price is showing a bullish recovery and is supporting the chances of a bullish recovery. With a double bottom reversal from the $0.313 baseline, Cardano price is teasing a rounding bottom reversal.
The retracement trend, which traced the Fibonacci level during the correction phase last week, has broken above the 23.60% level and is attempting to break above the 38.20% level at $0.346.
On the 4-hour chart, price has surpassed both the 20-day EMA and the 50-day EMA, although it is currently facing resistance from the 200-day EMA.
The rising 20-day EMA suggests a high probability of a bullish crossover. In addition, the DMI indicator shows a positive trend with a rising VI line and a rising ADX line, which signals that bullish momentum is forming on the 4-hour chart.
If the uptrend continues, Cardano price may reach the 61.80% Fibonacci level at $0.366 or even the 100% Fibonacci level at $0.399.
On a more optimistic note, the daily chart suggests that upside potential could extend to $0.422, which is in line with the 200-day EMA and the 23.60% Fibonacci level.
