Cardano (ADA) Outlook Looks Bullish, Here’s Why

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The crypto market-wide correction has also left its mark on the Cardano price. Nevertheless, ADA is holding up better than other altcoins. While Ethereum fell by 9.1% in the last seven days, Polygon (MATIC) by 11.1%, Cardano “only” fell by 7.6% in the same period.

In addition to recent strong fundamentals, a bullish chart pattern for ADA in the 1-day chart is also likely to play an important role. In this time frame, Cardano has formed a massive reverse head-and-shoulders pattern since last October, which came to fruition just before crypto prices collapsed.

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The reversed head and shoulders price signals the end of a downtrend and is therefore a trend reversal formation. Ideally, the head and shoulders – as is currently the case with ADA – forms the conclusion of a long-term downtrend.

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It occurs after a pronounced downtrend with three lows. The middle low is the highest and is called the head. The surrounding highs are called shoulders.

Investors usually enter a long position when the price rises above the neckline resistance, which can be considered a massively bullish sign. The current correction is bringing the ADA price back towards the neckline, although ADA had just broken out last week.

The move can therefore be seen as a bullish retest of the neckline. The level at $0.405 is the key price ADA bulls need to defend. Crypto analyst Ali Martinez pointed out the chart pattern lately and stated:

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The recent correction looks like a bullish retest before ADA reaches the target of this inverse head & shoulders formation. Still, the 200EMA on the daily chart at $0.39 must hold ADA for the bullish outlook to remain valid.

Cardano reverse head and shoulders pattern | Source: Twitter: @ali_charts

Fundamental Outlook For Cardano Equally Bullish

Ken Kodama, founder and CEO at Emurgo and co-founder of the Cardano project also shared a number of bullish reasons today that can be attributed to fundamentals. As Kodama explains, the Voltaire era and CIP-1694 are the biggest topics for Cardano right now.

One point where Cardano stands out is developer activity. In 2023, Cardano is a frontrunner for developer activity on GitHub. In recent years, Cardano has been the most actively developed blockchain network, according to Santiment, and is consistently in the top 3 from month to month, according to Kodama.

The ADA co-founder also highlights the recent Dynamic P2P Nodes upgrade, which allows Cardano stake pools to be more decentralized and improve connectivity to other nodes. Voltaire and CIP-1694 will provide the foundation for community-driven on-chain governance of Cardano. Regarding stablecoins, Kodama states:

Cardano native stablecoins are assets as they help with liquidity, allow for an on-chain safe haven, and a faster alternative to traditional payment processors. There are still questions about the use of stablecoins, but development continues and they are gaining traction.

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Cardano’s DeFi space is also making great progress, as NewsBTC shared recently. Cardano’s DeFi has reached TVL all-time highs in recent months. “DEXs, and other DeFi products continue to build and attract users, building the overall #CardanoDeFi ecosystem,” concluded the Emurgo founder.

At press time, the ADA price was at $0.4023, fighting to accomplish a daily close above the neckline.

ADA price, 1-day chart | Source: ADAUSD on

Featured image from Forbes, chart from

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Author: Jake Simmons

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