Bullish cup and handle pattern increases the Cardano (ADA) price for a new ATH

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Smart contracts have been a revolutionary force in the blockchain industry as they have enabled the creation of decentralized financial protocols, non-fungible tokens, and a new way to conduct transactions without intermediaries.

Cardano (ADA) is one of the many projects that gained momentum over the course of 2021, and now that the project’s long-awaited smart contract features are about to become a reality, the token is about to become a reality to set a new all-time high.

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Data from Cointelegraph Markets Pro and TradingView show that ADA’s price rose 139% from a low of $ 1.02 on July 20 to a multi-week high of $ 2.45.

ADA / USDT 1-day chart. Source: TradingView

Here’s a look at what some analysts and traders are saying about the recent price action for ADA, and what token holders should keep an eye on in the short term.

A bullish rally in the 50MA

The rapidly rising price of ADA has been difficult to ignore for most traders, especially as several technical indicators have now turned bullish.

One such indicator is the 50-day moving average (50MA), which is now on a downward trend after around 2 months, as highlighted in the following graph from pseudonymous Twitter user Pharmlord.

ADA / USD 1-day chart. Source: Twitter

As can be seen in the graph above, after breaking the 50-MA, ADA price doubled and is now on the verge of hitting a new all-time high at $ 2.46.

Turning over $ 2.30 to assist is key

A glimpse of the important levels ADA bulls need to watch out for was provided by Rekt Capital, a pseudonymous Twitter analyst who noted the importance of the $ 2.30 level.

ADA has already managed to convincingly overcome a lower resistance zone shown in red on the chart above and is now trying to break the all-time high of May 16 at USD 2.46.

According to Rekt Capital:

“The only major resistance that will remain before a new all-time high is the black level ahead of us (~ $ 2.30).”

Related: ADA hits $ 2 for the first time since May prior to the announcement of Cardano’s smart contract

A broken cup and handle confirms the ATH

According to the Twitter user ‘Fidzcrypto’, ADA shows a clear cup and handle formation in the daily time frame.

ADA / USD 1-day chart. Source: Twitter

Investopedia names the cup and handle pattern as a technical indicator that resembles a cup with a handle, with the cup being shaped like a “U” and the handle having a slight downward drift. “

The cup portion of the pattern can be seen on the chart between May 14th and August 16th, while the grip on the decline and rebound can be seen from August 16th to August 18th.

According to Investopedia:

“The cup and handle are considered a bullish signal, with the right side of the pattern typically showing lower trading volume. The formation of the pattern can only take seven weeks or up to 65 weeks. “

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every step of investing and trading involves risk, so you should do your own research when making a decision.