Technical Analysis: Cardano (ADA) Price Prediction for 2022
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Technical Analysis: Cardano (ADA) Price Prediction for 2022

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10 months ago

Cardano (ADA) is aiming for another incredible run this year. Is ADA just getting started or will it continue its accumulation? Read more to find out!

Technical Analysis: Cardano (ADA) Price Prediction for 2022

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Cardano (ADA), has seen a lot of growth in 2021. Not only has the project made fundamental strides towards being a major DeFi player, but also in price.

The proof of stake blockchain platform is one of the first to be founded on peer-reviewed research and developed with evidence-based methods. Cardano looks to redistribute power from unaccountable structures to the individuals. With its pioneering technologies, it provides unparalleled security and sustainability in decentralization systems. The ADA token allows for holders to participate in the network. Those who hold the token have the right to vote on any proposal to make changes to the blockchain.

In this article, you'll see multiple time frames for Cardano's native token ADA.

At the time of this writing, ADA ranks fifth among the largest cryptocurrencies in the world, according to CoinMarketCap. The market cap is sitting around $50.3 billion.

The last time we looked at ADA we saw an increase of over 9,000% in the year 2021. Since we last looked at ADA, we have seen a 25% increase in its price!

This year has just started, now let's take a deep dive into the charts!

ADA/USDT on a Monthly Chart

Using the logarithmic chart, we make things easier to understand.

Looking at the monthly time frame, there is no question that the trend is in favor of the bulls. Let us look at a couple of similarities.

Now, look at the first black circle. You can see that the resistance was broken at $0.086 and then the token retested the support level. The price action then broke out at $0.138 and continued its new trend. The left structure leaves clues. You can see that this was the previous high before it was taken out. This led to ADA's bullish run in 2021.

Fast forward to today's price action, we now see that the token is establishing a support level. With roughly more than half the month gone, there is plenty of time to see the bulls regain short-term control. Are there signs on the lower time frames showing strength?

Let's take a closer look!

ADA/USDT on a Weekly Chart

Sticking with our logarithmic chart, and now looking at the weekly time frame. You can see the price action is establishing support in our area of interest zone.

The last time the price was at this level, the market witnessed an increase of 160%! History does not always repeat itself, but it does often rhyme.

Let's look at the first black circle and compare it with today's price action. The last time the price was sitting on top of an accumulation zone we saw some consolidation. There is no confirmation of the next direction, but we do see some early signs of bull regaining control. The bulls need to act or lose this critical level.

If they manage to regain control here, ADA will continue towards its previous high. However, if the level is lost, the price will continue to make lower lows and lower highs like we did in June 2020.

ADA/USDT on a Daily Chart

Again, let’s use the logarithmic chart and shift down to the daily timeframe. This time frame gives us a better look at what happens on a daily level.

Here we can see a strong rejection from major resistance and the bearish channel. The price action is now looking for support, the nearest one is available at $1.333. In the short-term, the bears remain in control; a flip of minor support is a good sign, indicating that the bulls are coming back.

If the price closes below the area of interest, expect the price to continue making lower lows. A close above the recent local top and the next target is $2.30.

Waiting for confirmation of direction, like taking out a previous high or our area of interest. These are the signs of strength. For bulls a close above $1.60 is important while for bears a close below the area of interest is crucial. For now, the bears are in control for a short-term.

ADA/BTC on a Monthly Chart

Last but of course not least, ADA compared to BTC using the logarithmic chart. The price action is now looking to flip a critical level. Let's take a look!

The last time the price was at this level with a close below 3,000 satoshis, we saw the price continuing its downtrend. The second time we were at this level, we only saw a short-term correction before the price continued its upside trend. As my favorite quote is “history doesn't always repeat itself but it does often rhyme,” it does apply here as well!

Using the Fibonacci retracement tool, you can see the price approaching the 38.6% retracement level. However, the price has started establishing support. It is now looking to flip its previous resistance into support. A confirmation of support at this level leaves the door open for price action to revisit its ATH. That being said, if we see a strong rejection at this level, expect the bloodshed to continue.

One thing we are sure of is ADA outperformed BTC in 2021.

Summarizing the Above

  • ADA on the monthly time frame shows that the trend is in favor of the bulls.
  • ADA on the weekly time frame shows that there is no confirmation of the next direction, but we do see some early signs of bulls regaining control.
  • ADA on the daily time frame shows that the bears are in short-term control.
  • ADA/BTC on the monthly time frame shows that ADA outperformed BTC in 2021.

Remember that this is all based on the subjective views of the writer. As always, do your own research.

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