Cardano has entered the price discovery phase, implying that further increases are on the way.
Cardano has snatched the limelight from Bitcoin, surpassing its all-time high set in May. However, now that ADA has entered the price discovery phase, a technical pattern implies that it still has space to rise.
Cardano reaches new ATH
Cardano has recently been on a tear, reaching a new all-time high of $2.58. Over the last month, the so-called “Ethereum Killer” has risen by 153 percent, overtaking Binance Coin as the third-largest cryptocurrency by market size.
The introduction of smart contracts, which is scheduled for the network’s Alonzo update on Sept. 12, looks to be boosting Cardano‘s stock. The inclusion of smart contracts to the Proof-of-Stake blockchain will enable the development of decentralized apps (dApps) in Plutus, the company’s programming language, for use cases such as DeFi and NFTs.
According to technical analysis, the remarkable upward price movement witnessed in the previous 24 hours looks to have resulted from the break of a bullish flag on the 12-hour chart. The pattern’s flagpole was generated by the 54 percent rally between Aug. 9 and Aug. 14, while the flag was fashioned by the descending channel that appeared shortly after.
Additional buying pressure might push ADA up another 11% to $2.87 per share. Again, the breakout point is multiplied by the height of the flagpole to get at this objective.
Cardano must stay above the $2.47 support level for the bullish outlook to be confirmed. On the other hand, a sharp drop may result from a rapid rise in profit-taking that drives ADA below this crucial demand level.
A breach of the $2.47 support would raise the likelihood of a downswing to $2.15 or perhaps $1.90, according to the Fibonacci retracement level (measured from May 16 high of $2.47 to May 19 low of $1).