Cardano News: Can ADA Rise to $5? This Bullish Pattern Suggests It Might

Most digital assets are up during the Asian session as they rallied during the weekend just days after the Federal Reserve decided to maintain interest rates unchanged as expected.

ADA has earned a meager 1.1% in the past week while Solana (SOL) and Ethereum (ETH) rose by 12.3% and 9% during this same period.

The Cardano network has lagged behind its peers in terms of adoption and currently ranks 19th by the total valued locked (TVL) within its decentralized finance (DeFi) ecosystem.

The network has struggled to attract developers as it has missed significant trends that have propelled most smart contract networks. Cardano does not support traditional stablecoins like USDT and USDC while it also missed the meme coin boat as no improvements were made to the network to support this kind of digital asset.

Bull Flag Breakout Could Push ADA to $5

However, ADA’s weekly chart suggests that the rally that started back in November could continue as a bullish pattern has popped up in this higher time frame.

A bullish flag has emerged as the price of ADA has been consolidating after surging to $1.3 back in December. Bullish flags are continuation patterns that indicate a brief pause in the rally as late buyers take advantage of the temporary retreat to further propel the price of the asset.

Using the flag’s pole size as a reference, we can project that the price of ADA could rise to $5 if it breaks above the $1.3 level in the next few weeks.

President Donald Trump gave Cardano a pad in the back this month when it included ADA in a proposed list of assets that would have supposedly made it to the U.S. strategic digital asset stockpile.

Although the funding mechanism of this crypto reserve was later changed to include only assets that the federal government already owns, ADA’s mention by the President contributed to bring attention to this blockchain project.

Momentum indicators are not yet favoring this bullish outlook as the Relative Strength Index (RSI) is currently standing below the signal line while the MACD’s weekly histogram shows steadily increasing negative readings.

Lower Time Frames Exhibit Bullish Structures

Moving to the daily chart, an ascending triangle has formed lately. This is a bullish formation where the price of the asset makes a series of higher lows during a certain period but has not yet broken its nearest resistance.

As buying pressure mounts, the price eventually breaks above that resistance. If this is the case for ADA, the token could once again move to the $1 area as long as it can break above the $0.760 level.

Momentum indicators have just sent a buy signal in this time frame as the Relative Strength Index (RSI) crossed above the signal line while the MACD’s histogram has posted its first positive reading in around two weeks.

Up to this point, we have unconfirmed bullish setups in both the weekly and daily charts. Now, moving to the 1-hour time frame we can see that a bullish structure has also been forming since Sunday afternoon as the price broke above two key resistances.

Now that the American session is about to start, nothing seems to stand in the way of ADA to reach the $0.75 level or higher. If positive momentum picks up and accelerates during the afternoon, we could see ADA retest the daily triangle’s resistance.

A break above that level would confirm a bullish outlook in both the hourly and daily charts for ADA. Although the Cardano network may not be the strongest among its peers, the technical outlook for its native token seems bullish across these three time frames.