Cardano (ADA) is flashing familiar signals, with its current price action mirroring an earlier bull cycle that led to massive gains.
Specifically, renowned cryptocurrency analyst Ali Martinez highlighted a striking similarity between ADA’s 2020 rally and the current market structure, suggesting that a surge to $6 could be on the horizon, he shared in an X post on December 22.
In 2020, ADA experienced a steep correction following the initial breakout from its accumulation phase. The first significant dip during ADA’s uptrend occurred at almost the same point in the cycle as the current correction.
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What followed that correction was a 4,095% rally, taking ADA from under $0.10 to an all-time high above $3 by August 2021. In 2024, Cardano appears to be repeating this pattern. After breaking out from a lengthy accumulation phase, ADA’s price retraced by around 42%, similar to its 2020 pullback.
Therefore, if history repeats itself, ADA could climb as high as $6, reflecting an increase of about 560% from the asset’s current valuation.
Such a price target would likely put Cardano’s market cap at almost $210 billion, placing it in the third spot among assets with the highest market cap, provided other cryptocurrencies record minimal growth.
Martinez initially noted that Cardano could hit the $6 mark between July and September 2025.
At the same time, pseudonymous trading expert Kenshiyesreel, in an X post on December 22, observed that ADA would likely target $4 as the next major resistance zone.
Based on market structure analysis, the asset appears to have transitioned from an accumulation phase into a markup phase, signaling rising demand and bullish sentiment.
The $4 price level coincides with the distribution zone, where overbought conditions may arise.
Cardano’s fundamentals
Cardano’s ongoing efforts to enhance decentralization may support ADA’s price recovery. Notably, founder Charles Hoskinson envisions a fully decentralized blockchain governance model that includes all users and token holders.
To achieve this, Cardano seeks to finalize a community-ratified constitution and secure approval for its budget system, positioning the platform as a leader in the decentralized revolution.
The push for decentralized governance could reinvigorate investor confidence and drive ADA’s long-term price potential.
With the Chang Hard Fork in September 2024 setting the stage for these changes, the ongoing transformation might signal a pivotal growth catalyst for the platform and its native token.
ADA price analysis
By press time, ADA was trading at $0.89 with daily losses of about 0.92%. The decentralized finance (DeFi) asset has plunged almost 18% on the weekly timeline.
Although ADA is facing a correction soon, there is still room for regaining bullish momentum, considering the price sits above the 50-day simple moving average (SMA) of $0.8519 and the 200-day SMA of $0.493, signaling strong upward momentum. With a 14-day RSI of 44.54, ADA is in neutral territory, neither overbought nor oversold, with $1 as the next key resistance target.
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