Cardano price has moved sideways in the past few days and is now stuck at a crucial support level. ADA was trading at $0.3913, down by over 70% from its December 2024 high. However, technical analysis suggests the token may be on the cusp of a strong near-term bullish breakout.
Cardano Price Technical Analysis Points to a Surge
The weekly timeframe chart shows that the ADA price dropped to a low of $0.3355 in December and has since hovered around that level. This price was notable because it coincided with the ascending trendline connecting the lowest swings since June 2023.
The trendline is part of the megaphone pattern that has been forming in the past few years. A megaphone is composed of two converging trendlines and is a common bullish pattern.
The coin is also at the apex of point D of the Elliot Wave pattern. Therefore, it may be entering the final phase (DE), which is usually bullish. If this happens, the next target to watch will be at $1.3256, its highest level in December, which is about 250% above the current level.
READ MORE: Ethereum Price Prediction: At Risk of a 20% Crash Despite Growing Network Metrics
This ADA price forecast has two main caveats. First, it is based on the weekly chart, so it may take months or even years for the coin to reach its target.
Second, its lowest level in December will be a crucial one, as moving below it will invalidate the megaphone pattern. Such a move will point to more downside, potentially to the key support at $0.2173, its lowest level in 2023, which is down by 45% below the current level.
ADA Has Potential Catalysts
Cardano token has several potential catalysts that may push it higher this year. First, there is a chance that Hydra, its layer-2 scaling solution, will see more adoption in the next few years.
Second, the developers will launch the Midnight mainnet in the current quarter after the successful launch of the NIGHT token. Midnight aims to become a major player in the privacy industry by using zero-knowledge (zk) technology.
Midnight launches at a time when many cryptocurrency experts are betting on the privacy industry. Indeed, tokens like Monero and Dash have been some of the top gainers this year. However, the main risk is that Ethereum plans to launch its zk upgrade soon.
Third, the developers are working on the Leios upgrade, which will boost its network speed. On top of this, they are implementing the Pentad proposal that aims to bring in tier-1 stablecoins, analytics platforms, and oracle networks. It has already incorporated Pyth, a top oracle network, and Dune, a leading analytics platform.
READ MORE: Dogecoin Price Forms an Alarming Pattern as DOGE ETF Inflows Dry
