ADA, the native token of the Cardano blockchain, appears to be facing a small correction after a bullish breakout

Despite the ongoing price correction on the four-hour timeframe, ADA seems to be forming a bullish inverted head and shoulders pattern

ADA, the native token of the Cardano blockchain, appears to be facing a small correction after a bullish breakout on March 11. Despite the ongoing price correction on the four-hour timeframe, ADA seems to be forming a bullish inverted head and shoulders pattern on the same timeframe.

According to expert technical analysis, ADA appears bullish on both the four-hour and daily timeframes. It has recently taken crucial support from a key level of $0.65, and the price has now begun to recover. On smaller timeframes, it seems to be forming a bullish price action pattern, indicating a potential upside rally soon.

If the asset breaches the bullish pattern and closes a four-hour candle above the $0.75 level, there is a strong possibility it could soar by 9% to reach $0.80 in the coming days. Additionally, this could further open the gate for a 40% upside rally, potentially pushing the price to $1.13 in the near future.

With the recent price decline, the asset has already fallen below the 200 Exponential Moving Average (EMA) on the daily timeframe, indicating that it is still in a downtrend. However, its Relative Strength Index (RSI) appears to be recovering, which is a bullish sign for the asset.

ADA is currently trading at $0.72 and has experienced a price surge of over 2% in the past 24 hours. However, during the same period, its trading volume jumped by 20%, indicating heightened participation from traders and investors compared to the previous day.

As the price moves closer to the neckline of the bullish inverted head and shoulders pattern, traders’ bets on the long side appear to be rising, as reported by the on-chain analytics firm Coinglass.

Data reveals that traders are currently over-leveraged at $0.70 on the lower side, with bulls having built $12 million worth of long positions, believing the price won’t fall below this level. On the other hand, bears are currently over-leveraged at $0.75, having built $9 million worth of short positions in the past 24 hours.

When combining these on-chain metrics with the bullish price action, it appears that ADA could soon breach the neckline and soar significantly in the coming days.