In recent times, Cardano price has demonstrated significant market volatility which led to its failure to support previous gains.
The cryptocurrency dropped by over 3.30% in a day after achieving significant gains throughout last week.
ADA requires breaking through significant resistance barriers to sustain positive market movements.
A Breakout Above $1.14 May Trigger a Rally Toward $2
Technical indicators show that ADA may start an extended bull run if traders break past the crucial $1.14 resistance threshold.
Crypto analyst Ali Martinez has observed the right-angled descending broadening wedge pattern on the ADA chart that serves as a bullish indicator for a possible breakout.
In addition, Martinez noted that ADA faces significant recovery challenges from the powerful resistance at $1.14.
A successful breakout of $1.14 resistance accompanied by substantial buying volume indicates ADA might reach a subsequent target at $2.
Broader market sentiment as well as rising institutional interest creates favorable conditions for this bullish forecast.
Trump’s Crypto Stockpile Plan
More so, Cardano is benefiting from recent positive trends within the cryptocurrency sector.
Reports indicate that former U.S. President Donald Trump is accumulating a significant crypto stockpile.
This has fueled discussions about regulatory shifts that may benefit the industry.
Additionally, the U.S. Securities and Exchange Commission (SEC) has acknowledged Grayscale’s application for a Spot Cardano ETF.
The submission signifies progress in the ongoing regulatory framework though it does not imply formal approval.
A successful approval of the ETF would increase institutional investment in Cardano which could drive up its market value.
MACD and RSI Suggest Weakening Bullish Momentum
Meanwhile, the ADA price trend produces contradictory data from technical indicators.
The Moving Average Convergence Divergence (MACD) indicator points toward a bearish crossover as its histogram bars decline signaling a weakening buying momentum.
A sustained downward trend of the MACD lines could suggest short-term bearish conditions despite their current positive stance.
On the other hand, the Relative Strength Index (RSI) shows weakening bullish momentum.
Momentum appears to weaken because the RSI is moving toward the 50 zone.
ADA faces the risk of additional price drops before it starts to recover unless sell pressure intensifies.
Market participants follow support levels for clues that could indicate a market reversal.
Cardano Price Trades at $0.8209 After a 10% Drop
Currently, Cardano price is trading at $0.7814 following a 2.39% decrease during the previous day.
The cryptocurrency is currently facing downward pressure, leading to a 4.08% intraday decline.
If the bearish momentum continues, ADA could retest its immediate support at $0.735.
The top altcoin is confined in the price region spanning from $0.62 at the 50% Fibonacci retracement level to the $1.20 supply zone.
A strong weekend rally drove the market up by 72%, but prices moved sideways afterward.
The inability to sustain higher levels suggests a potential market correction before further gains can occur.
