- Cardano is trading at that apex of a symmetrical triangle as a massive breakout lingers.
- A break above the 50 SMA on the 4-hour chart will add weight to the expected upswing.
- The slump in network growth could hamper the bullish outlook and delay the breakout.
Cardano is in the middle of consolidation following a breakdown from the all-time high at $1.49. Support established at $1 allowed bulls to focus on recovery. Meanwhile, ADA is nearing a critical breakout point, likely to see it hit $2.
Cardano technical breakout around the corner
The formation of a symmetrical triangle pattern on the 4-hour chart brings to light a potentially massive breakout to $2. These triangles do not have a bearish or a bullish bias and are created by connecting trendlines. One trendline links a series of decline peaks while the other links a series of ascending lows.
A breakout from the triangle is expected when the price slices through the upper trendline. On the other hand, a breakdown occurs when the price tumbles below the lower trendline. Triangles have precise targets measured from the highest to the lowest points.
Currently, Cardano is likely to make a breakout from the triangle, followed by a 68% upswing to $2. Besides, trading above the 50 Simple Moving Average (SMA) will validate the bullish outlook.
ADA/USD 4-hour chart
The Bollinger Bands have reinforced the ongoing consolidation. Cardano has also settled above the middle boundary as bulls fight for a breakout. The squeezing bands hint at a breakout in the near term.
ADA/USD 4-hour chart
Looking at the other side of the fence
According to IntoTheBlock, Cardano is currently dealing with decreasing network growth. In other words, the number of newly-created addresses has been decreasing since it topped out at nearly 73,000 on February 20. At the time of writing, unique addresses joining ADA stand at roughly 18,000, representing a 75% downswing.
Cardano network growth
It is worth keeping in mind that a slow or declining network growth is a bearish signal. The decrease interferes with the normal token inflow and outflow. Simultaneously, it shows that mainstream adoption is going down, hence hampering both price and network growth.