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Cardano Defies Market Pullback, Eyes Breakout Toward New Highs
Cardano (ADA) has shown resilience in a volatile market, holding crucial support levels and signaling the potential for a fresh rally despite a broader cryptocurrency sell-off.
ADA Holds Ground After Sharp Drop
On Thursday, ADA suffered an 11% decline after briefly surpassing the $1.00 mark for the first time since March. The drop coincided with a sharp market-wide correction that wiped out more than $1.05 billion in leveraged positions over the past 24 hours, according to CoinGlass. The sell-off was fueled by hotter-than-expected U.S. inflation data, with the Producer Price Index showing a 3.3% annual increase—well above forecasts of 2.5%.
Further dampening sentiment, U.S. Treasury Secretary Scott Bessent announced that the government would halt new Bitcoin purchases for its Strategic Bitcoin Reserve. Instead, it will grow reserves solely through seized assets. The decision came just a day after Bitcoin reached a record high of $124,128 before retreating to the $117,000–$118,000 range.
Despite the broader downturn, ADA managed to buck the trend, posting a 3.5% daily gain and standing as the only cryptocurrency in the top 50 to remain in positive territory. The token hit a five-month high of $1.02 on Thursday morning before settling in the $0.89–$0.91 range, maintaining its breakout level.
Analysts See Familiar Bullish Pattern
Market analyst Ali Martinez pointed out that Cardano has been trading in a descending channel since its December 2024 peak at $1.32. After multiple failed attempts, ADA broke above the channel’s resistance when it surged past $0.84. Martinez suggests that this move could pave the way for a 70% rally toward $1.50 if the breakout holds.
Other analysts have noted striking similarities between ADA’s current price action and its 2020–2021 bull cycle. Crypto Yhodda highlighted that the token is mirroring its previous cycle’s pattern, which followed an ABC corrective wave and a prolonged consolidation in an ascending broadening wedge before the breakout to its all-time high of $3.09 in 2021.
Since late 2024, ADA has been trading in the upper half of a similar wedge formation, suggesting it may be poised for another significant upside move if the historical playbook repeats.