Cardano could skyrocket to $7 if this pattern plays out

Cardano’s (ADA) DeFi ecosystem finally surged in 2023 after years of developments, promises, and awaiting. This growth fueled the demand for its native token ADA, renewing investors’ confidence and forecasts.

Much of Cardano’s past price action was mostly speculative in future deliveries that started happening recently. Notably, the speculative nature was enough for a bull run to $3.00 in 2021, following a consolidation range breakout. With the fresh demand, ADA could be on its road to reaching $7 per token soon.

According to the renowned cryptocurrency trader Ali Martinez, ADA surged nearly 3,000% from the 2020 breakout to all-time highs. The trader’s account @ali_charts shared this analysis on X (formerly Twitter) on January 19.

ADA/USD 3-day price chart. Source: Ali Martinez (@ali_charts) 

Cardano price analysis on the road to $7

As of writing, Cardano is trading at $0.51 in a 664-day consolidation range, similar to 2020’s 667-day pattern. Interestingly, Ali Martinez warned of a possible rally to $0.80, followed by a retracement to $0.60 before going higher.

“Cardano’s current consolidation phase mirrors its late 2020 behavior. If history repeats itself, we might see ADA resuming its upward trend around April. This pattern continuation could potentially lead to an upswing toward $0.80, a brief correction to $0.60, then $7!”

However, past performance does not guarantee future occurrences, which could be worse or better than expected. Understanding Cardano’s supply and demand dynamics is key to properly forecasting ADA investments.

For example, Cardano currently holds the 12th position in DeFi with a $352.53 million total value locked (TVL). Despite a remarkable achievement for its ecosystem, this is relatively low compared to ADA’s $18.27 billion market cap.

Top 12 DeFi chains by TVL. Source: DefiLlama

Therefore, some analysts see it as an overbought indicator, weighted by the token’s usability in decentralized finance protocols. In conclusion, investors must remain cautious despite resemblances and always do their due diligence before deploying capital on cryptocurrencies.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.