Technical Analysis: Cardano (ADA) Price Prediction - How High Will It Go in 2022?
Trading Analysis

Technical Analysis: Cardano (ADA) Price Prediction - How High Will It Go in 2022?

4d"
9 months ago

Will ADA hit $3.1 again? The token is about 61% down from its all-time high. Read more to find the key levels the ADA coin has to flip to make new all-time highs!

Technical Analysis: Cardano (ADA) Price Prediction - How High Will It Go in 2022?

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Cardano (ADA) had significant fundamental developments recently, with the release of its DEX, named SundaeSwap (SUNDAE). In addition to that, new dApps are expected to be released this year. This has attracted lots of new market participants, potentially affecting the price. With Bitcoin (BTC) continuing to show strength into the 40k zone, will ADA also make a strong push? In this technical analysis, we will use multiple technical indicators to observe ADA charts.

ADA/USDT in a 1-Day Chart

Cardano has bounced perfectly off the range lows and the demand zone at around $1. The price has started ranging between $1 and $1.5. There is a chance that the price could deviate below this demand zone before going higher, taking the liquidity down as well if BTC goes weak again. If we start to close consistently below $1, I think $0.25 is on the table. However, with the price bouncing nicely off the demand zone and approaching the trendline, there is a greater chance of a breakout here, allowing ADA to squeeze higher.

ADA/USDT in a 1-Week Chart

As identified on the 1-day chart, the price has bounced off a large demand zone. ADA looks like it is in a big macro range (with a deviation at $2.6). If the price can reclaim $1.5, it would break the bearish market structure it has been in since October. It would then be wise to assume that it will test the top of the range, especially due to the positive divergence that has been formed on the RSI chart. If it cannot reclaim the $1.5 level, it is likely that we will test the lower range, forming a divergence at range lows, potentially moving down to $0.39. However, this is a worst-case scenario.

ADA/USDT in a 1-Month Chart

As can be seen on the ADA monthly chart, the price has been in a downtrend for more than four months. It was still a bullish market structure until last month when the price closed below $1.1.

If we can reclaim this order block around $1.3, there Is a significant chance that the price will go higher. If it loses the monthly support (around $0.9), the next support is around $0.4. This is more than a 50% drop, therefore, this level will be strongly defended by the bulls.
If the price breaks the $1.75 level, it would effectively start to form an uptrend again. The only way to reclaim the bullish market structure is to take out the all-time highs.

It is wise to compare ADA to BTC and ETH. It will help in analyzing if ADA will outperform the general market leader and the L1 leader. If the price looks like it will not outperform either of them, it makes no sense to hold it. Let's hop onto the charts and see how they look.

ADA/BTC in a 1-Day Chart

ADABTC is currently consolidating in a tight range/demand zone. If the price reclaims 2954 sats, we could easily test the trendline for a big pump. This would open the door to 5000 sats if we manage to pump above the trendline (over 50%).
However, if the price ends up closing below 0.00002616, we will move to 1940 sats. If this happens the worst-case price scenario is a nuke down to the accumulation range at 1000 sats. However, if the price goes anywhere near this demand zone, it would likely be snapped out instantly by buyers since this is where the origin of the first pump in 2021 was.

ADA/ETH in a 1-Day Chart

As you can see, after a very heavy downtrend, the price found support around 0.330 (a major demand zone). It has since started to form an uptrend, with a bullish market structure on the daily.

If it can reclaim 0.39, it will likely continue this uptrend to around 0.55. This would, therefore, mean that ADA would outperform ETH in the foreseeable future. If price gets rejected from this level, it is likely to retest demand zone lows again, and maybe fall into the previous range of around 0.2. This would not be a good sign for ADA bulls as the price would likely take a while to accumulate before going up again.

Summarizing Everything

  • ADA has bounced off range lows and the demand zone at $1. If the price tests $1.5, it would break the downtrend, potentially allowing the price to test ATHs again.
  • The ADA 1-week chart shows that it is in a big macro range (with a deviation at $2.6). If it flips $1.5 and breaks the bearish market structure, we will likely test higher.
  • The ADAUSDT monthly is currently at a pivotal resistance level that needs to be flipped so that bulls can enter long positions.
  • ADABTC is currently consolidating in a tight range/demand zone. If the price reclaims 2954 sats, it will test the trendline, opening the door to 5000 sats.
  • The ADAETH chart price has found support around 0.330. If the price can reclaim 0.39, it will likely continue this uptrend to around 0.55.
New to trading? Check our guide on how to find support and resistance level to learn the basics!
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