ADA price action as of late points to strong support at the $0.488 price level as the cryptocurrency continues its weak performance over the past month. However, according to cryptocurrency analyst Ali Martinez, Cardano's current price performance is somewhat replicating previous price action.
The analyst noted that Cardano's price action is largely similar to late 2020, when ADA began a massive bull run. If history repeats itself, Cardano could be poised for another major rally that would take the price to $8.
ADA Price Chart Shows Similarities to Previous Consolidation
Cryptocurrencies are known to repeat previous price action, giving analysts an idea of what to expect based on the performance of previous performance. With this in mind, a technical analysis of Cardano published by Ali Martinez on social media platform X looked at the past performance of the cryptocurrency.
More precisely, the analyst noted that the current consolidation is a precursor to a bullish rally that may follow further. If the analysis is correct, Martinez noted that ADA could consolidate until April 2024.
Should the patterns align and #Cardano mirrors its late 2020 price behavior, we can anticipate $ADA to remain in a consolidation phase until April 2024, setting the stage for its next bull rally! pic.twitter.com/xEKu1LQRRo
— Ali (@ali_charts) February 3, 2024
The last time this type of consolidation occurred, ADA ended up breaking out and rising 3,217% over the next 287 days. A repeat of this phenomenon after the consolidation is complete will result in ADA approaching the $8 target in January 2025. This would represent an increase of more than 1,760% from current price levels.
Current state of Cardano
ADA price action has been pointing to making lower highs since hitting a 2023 high of $0.6655 on December 14, 2023. In particular, the cryptocurrency was recently rejected near the $0.5241 price level, indicating a lack of strong buying momentum from bulls.
IntoTheBlock data shows that 45% of ADA addresses are currently profitable, and recent analysis indicates that this figure will remain unchanged until at least April. However, there is no guarantee that ADA will follow Martinez's predicted pattern or reach its $8 target, as the cryptocurrency market is notoriously volatile and difficult to predict.
In terms of activity, Cardano processed over 4 million transactions in December and January. According to recent reports, there has also been a 67% increase in the adoption of smart contracts on the Cardano (ADA) network.
Charles Hoskinson, founder of Cardano, has argued that the Cardano blockchain is significantly more advanced than Bitcoin in terms of development, layer-2 networks, and flexibility to accommodate developers on the blockchain.
While Cardano is up 2.62% over the past seven days, the cryptocurrency is down 9.37% on the larger 30-day timeframe.
ADA Price Reaches $0.5 Again |Source: ADAUSD on Tradingview.com.