How high can Cardano (ADA) go?

As the daily chart shows, this coin has posted a significant uptrend over the past few months. Of course, other coins in the rest of the market have made similar or even stronger moves. How high can Cardano go? It surprised us quite a bit during the rebound after the big panic sell-off on May 19.

We want to focus on the technicals of the chart, and to that end we take action using the Fibonacci tool. As shown on the chart, we pick the peak that Cardano hit at $2.47 as the top and the price it hit on May 19 at $1 as the bottom (the move with the yellow arrow, top to bottom). Using these levels as reference points, we see that during the rebound (purple) Cardano reached as high as $1.91 and then headed down again to around $1.05 (blue), a move roughly in line with the overall market. Then, in the next upward wave (black), from May 23 to May 26, Cardano again rose significantly relative to the rest of the market, essentially outperforming it.

This particular move could be described as random, but we consider it fairly significant, as it tells us something. For this simple reason we will set the top and bottom of this trading range, i.e. $1 and $1.9, as key levels, and we will lie in wait to follow whichever direction the market breaks out in, up or down, since we believe a significant move is coming. At that point we will watch out for a possible breakout that turns out to be a trap, meaning we will wait for the breakout to be confirmed by increased trading volume and a duration of more than two days (we will set these as conditions in the so-called trading plan we will follow). 

In the bullish breakout scenario, we can hope that if the $1.91 price breaks, the road will open back to $2.47 and even well above that, close to $3.40, over a much longer time horizon. That would require, however, seeing the rest of the market rise too. We like to set some realistic price targets so we know when we’ll take profits.