After recovering from its local lows, Cardano (ADA) is retesting a key area that could send the price to the next crucial resistance. Some analysts suggest that the cryptocurrency is preparing for a massive rally.
Following last week’s drop to the $0.70 support, Cardano is attempting to break out of a crucial resistance level to continue its rally. The cryptocurrency has surged 8.8% from Friday’s low, retesting the $0.74-$0.76 area throughout this week.
Since then, Cardano has been in a downtrend, attempting to break out of the descending resistance for the past two weeks. Market watcher Sebastian noted that the cryptocurrency has repeatedly retested the $0.76 zone over the past few days, suggesting that “the more it tests it, the higher the likelihood to break it.”
According to the analyst, ADA must reclaim the 50-day Moving Average (MA), which has served as a strong resistance and support level and coincides with the descending resistance breakout area.
Meanwhile, a rejection from this area could propel Cardano to retest the recent lows and risk losing its local range again.
Additionally, Martinez asserted that “ADA is showing the same price structure as the last cycle, only this time, it’s unfolding more gradually. And it feels like we’re right at the beginning of an explosive move.”
Last month, the cryptocurrency broke out of its eight-month downtrend, targeting a rally toward the $1.60 area. Now, ADA is retesting the descending resistance line, which could set up the stage for the 120% jump if the breakout is confirmed.
As of this writing, Cardano is trading at $0.74, a 3% increase in the daily timeframe.
