How close is Cardano to reclaiming the $2 price level?

Grayscale recently announced the addition of Cardano to its large-cap funds with a 4.26% allocation. This was big news for the platform, one that would garner attention from large and accredited investors wishing to invest in the project. What’s impressive is that Cardano has not taken a back seat and continues to work towards opportunities in the smart contract and NFT space as well.

Meanwhile, its native cryptocurrency ADA has risen on the back of this bullish sentiment and a wider crypto recovery. At the time of writing, ADA traded at $1.44, up by 1.8% over the last 24 hours.

ADA Daily Chart 

Source: ADA/USD, TradingView

The ADA market has been building up towards an ascending triangle breakout for the past week and a half. Its pickup from 22 June swing low of $1 was necessary as this led to the formation of higher lows. Its latest rise above $1.40 was also an important development as this allowed ADA to challenge its next and debatably, a more crucial resistance zone of $1.46-$1.47.

Interestingly, the 50% Fibonacci extension of its 19 May low and its 12-hour 200-SMA (not shown) also coincided with this resistance zone. Hence, an argument can be made that a successful close above these levels would allow for a gradual pick up towards the $1.88-resistance area and the $2-mark.

Reasoning 

Relative Strength Index was on an uptrend and climber above 50 at the time of writing. A move above 55 would be a first in over a month and half- one that signify strong buying pressure in the market. Awesome Oscillator noted a series of green bars as bullish momentum was building up in the market. Directional Movement Index was still indicative of a bearish trend but -DI and +DI did converge. A bullish crossover would denote a shift in market dynamics.

These were encouraging signs as ADA eyed a break above its upper trendline. Its next targets would be the 61.8% and 78.6% Fibonacci extension levels that rested at $1.58 and $1.73, respectively. Consolidation within this zone would open doors for a comeback towards the $2 price level. To invalidate ADA’s bullish setup, bears must target a fall below 2 July’s low of $1.285.

Conclusion

ADA’s price was on the verge of an ascending triangle breakout and targets were set at the 61.8% and 78.6% Fibonacci extensions of $1.58 and $1.73, respectively. If bulls manage to hold on to the aforementioned levels moving forward, there was a chance that ADA would reclaim $2 sooner rather than later.

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