Cardano's ADA Price Surge Signals Potential for Further Gains

According to Cointelegraph, the native token of the Cardano network, ADA, has experienced a significant price increase, marking a potential end to its prolonged downtrend. Since June 22, ADA has risen over 70%, with a notable 75% gain recorded between June 22 and July 18. This upward trajectory saw ADA bottom out at $0.50 in June and reach a 20-week high of $0.89 on Friday, indicating a strong recovery. The recent rally has been fueled by multiple bullish signals, including the behavior of the Bollinger Bands volatility indicator. Historically, when ADA's price touches the upper band of the Bollinger Bands, it suggests an imminent rise in volatility, potentially leading to substantial price rallies. Previous instances in 2021, 2022, and 2024 saw ADA's price increase by 1,500%, 117%, and 300%, respectively. The current squeeze of the Bollinger Bands, coupled with ADA's price touching the upper band, adds weight to the possibility of another significant rally. Despite the recent gains, ADA's price remains nearly four times lower than its all-time high of $3.10 achieved in 2021. However, the token has shown multiple bullish signals across various time frames, indicating that the rally may continue. ADA has broken out of a bull flag on the weekly chart, converting key resistance levels, such as the 50-day and 200-day simple moving averages, into support. The measured target for this bull flag is $2.70, representing a potential 216% increase from the current price. Further supporting the bullish outlook is the formation of a golden cross, where the 50-day SMA crossed above the 200-day SMA, reinforcing the continuation of the uptrend. Additionally, the moving average convergence divergence (MACD) indicator has produced a bullish cross, suggesting strengthening trend momentum. The weekly relative strength index (RSI) indicates that ADA has room to grow before reaching overheated levels, similar to previous cycle tops in 2018, 2021, and December 2024. Despite the daily RSI being at 80, historical data suggests ADA could rally an additional 130% to reach $1.80, according to analyst Deezy. This analysis is based on past performance when ADA's daily RSI hit similar levels. However, readers are reminded that this article does not constitute investment advice, and all trading decisions should be made after conducting thorough research, as investments carry inherent risks.