Analysis of Cardano: Is ADA Repeating the Previous Cycle?

Cardano (ADA) is currently showing an impressive recovery after breaking through the previous high and has reached the $1.14-$1.15 range. The similarities with the previous cycle are striking, and it appears that Cardano is following an almost identical pattern. Let’s delve further into the situation.

A Look at the Cycles: Similarities Between Cycle 1 and Cycle 2

When we compare the current cycle with the previous one, we see an almost exact copy of the price structure. In cycle 1 we saw:

• Double tops: ADA formed a double top followed by a short downtrend.
• A strong impulse: After this consolidation, we saw a powerful upward movement.

In cycle 2 we see the same setup:

• Double tops, followed by a short downward movement.
• A similar impulse to the current price of $1.15.

The interesting thing about this comparison is that, if we disregard the impact of the COVID crash, the current cycle accurately mimics the previous one.

The Role of the Fibonacci Extension

An important element in the previous cycle was the 1.618 Fibonacci extension. In the previous cycle, we saw a correction occur exactly around this level, followed by a fallback towards the golden pocket (between the 0.618 and 0.65 Fibonacci retracement). If we apply this same pattern to the current cycle, we see that Cardano has again shown a reaction around the 1.618 Fibonacci extension.

How Far Can Cardano Correct?

• In the previous cycle, the price fell back to the golden pocket, which corresponds to a level around $0.80.
• Currently, however, we already see some support at the 0.786 Fibonacci level, which is around $1.00.

While it is possible that Cardano has already found a bottom here, a further decline towards the golden pocket would offer a plausible buying opportunity. Historically, the golden pocket often provides strong support.

The Question: Does ADA Follow the Previous Cycle?

If we assume that Cardano continues its pattern from the previous cycle, this means that the current correction is a preparation for a next impulse upwards. The scenario in which ADA falls towards the golden pocket would be a healthy pullback within a larger bullish structure.

It is important to remember that pullbacks are essential in an upward trend. They provide a reset of the market, collect liquidity, and prepare the price for a next move upwards.

What Does This Mean for Investors?

Cardano continues to look extremely bullish in the long term. The similarities with the previous cycle strengthen confidence in a continuation of the uptrend. For those on the sidelines:

• Golden pocket target around $0.80 could be a strong entry opportunity.
• Current support around $1.00 also offers potential for an early entry.

Just like in the previous cycle, it is important to remain patient and not fear pullbacks. They offer opportunities to enter a market that moves in waves.

Conclusion: ADA Remains a Strong Contender

With a powerful impulse behind it and a possible correction preparing, Cardano seems to be gearing up for a next rally. If history repeats itself, we will see ADA rise to new heights. It is now a matter of waiting to see whether the golden pocket is tested or whether the support around $1.00 proves sufficient. For investors, this means it’s time to stay strategic and seize opportunities in this dynamic market.

Disclaimer: The analyses above are based on technical patterns and trends in the crypto market. It is crucial to emphasize that this information is not intended as financial advice. Cryptocurrency investments inherently carry risks and are subject to volatility. For investment decisions, it is recommended to conduct your own research, seek financial advice, and only invest what you can afford to lose.