Cardanos buy signal reaches its strongest point in a month sets sights on 5

After trading below the $1 mark for several months, an analyst has identified a potential parabolic rally for Cardano (ADA) based on its technical setup. The analyst noted that ADA has triggered a powerful buy signal on its weekly time frame, with a target price of around $5. This buy signal is significant as it is the first time since October 2023 that Cardano’s one-week Logarithmic Moving Average Convergence Divergence (1W LMACD) has formed a bullish cross, suggesting a major upward move could be on the horizon.

The bullish cross on the 1W LMACD is considered one of the strongest long-term buy signals and mirrors conditions seen during previous bull cycles that propelled Cardano to new highs. The analyst also pointed out that ADA has been consolidating below its 50-week moving average (1W MA50) since May, which typically precedes a breakout.

Furthermore, the one-week Relative Strength Index (RSI) for ADA has been ranging, indicating a period of accumulation in the market. Once buying momentum picks up, there is potential for ADA to enter a new rally.

The analysis also highlighted the formation of a bullish megaphone pattern alongside the 1W MA50 and MA100, suggesting that Cardano could be at the beginning of a parabolic rally that may take it to new highs. The $5.00 price level is identified as a strong target for this cycle.

In addition to the technical outlook, ADA’s ongoing network development on the Cardano platform is expected to contribute to its growth. The platform has experienced a surge in the number of smart contracts and recently completed the first leg of its Chang hard fork, setting the stage for more decentralized governance and positioning the platform to compete with established entities like Ethereum (ETH).

Currently, Cardano is trading at $0.37, showing a gain of over 5% in the last 24 hours. The token is up almost 12% on the weekly chart. To confirm the bullish momentum highlighted by experts, ADA needs to break above its 200-day simple moving average (SMA), which could signal a stronger rally. Staying below it may indicate continued consolidation or downward pressure.