Cardano (ADA) Price Breaks Out of Bullish Pennant, Eyes 98% Upside

Cardano price seems to have found stability above the $0.850 support, following action above that level for the second successive session on Thursday.

Cardano (ADA) price seems to have found stability above the $0.850 support, following action above that level for the second successive session on Thursday. ADA was up by 1.9% at press time and traded at $0.938, bringing its weekly gains to 7.6%.

The coin’s slump below the $1 mark accelerated its depreciation as investor sentiment turned bearish in the last two weeks of December. However, it has recently broken to the upside of a bullish pennant pattern and could rise by as much as 98%.

Cardano price seems to have found stability above the $0.850 support.

On-chain Data Signal Rising Demand for Cardano

Near-term resistance for Cardano price lies at the psychological $1 level, and a retest of that mark could rejuvenate investor confidence in the coin. ADA has been an underperformer in the recent market rally, with 29% of the coin’s holders in “out of the money” positions as per IntoTheBlock data. Therefore, there’s a relatively lower selling pressure, which could help reverse the recent price trajectory.

Meanwhile, the Cardano chain recorded the largest percentage increase in its DeFi TVL in the last 24 hours. According to DeFiLlama, the Cardano ecosystem saw its Total Value Locked rise by 9.08% to reach $476.2 million during that period. However, the TVL is still small relative to Cardano’s market capitalisation of $33.2 billion. Nonetheless, a continuation of the DeFi TVL growth could help keep ADA price on the growth path.

ADA Price Breaks Out of Bullish Pennant

ADA price has recently broken out to the upside of a bullish pennant pattern on the daily chart, signaling a further extension of the upside. As seen in the chart below, using the pennant’s pole as a yardstick gives a price target of $1.858. That infers a 98% upside from the current price. However, ADA will need to breach and find stability above two key psychological barriers at the $1 and $1.50 marks to hit that target.

The bullish case for Cardano price is also supported by the rising trading volume. A rise in an asset’s traded volume during a price uptrend signals strong demand for the asset. It shows that investors are ignoring the rising prices to signal their confidence in the asset’s future performance.