Cardano (ADA) has emerged as one of the assets showing intriguing signs of a potential bullish reversal. After enduring a brief three-day bearish stretch, the price of Cardano is now testing crucial support zones, leaving analysts to speculate whether the asset is primed for a double-bottom reversal that could push the price higher, potentially reaching $0.41.

Cardano Forms Double-Bottom Reversal Setup

Cardano has recently shown signs of a potential double-bottom reversal, a technical pattern often associated with trend reversals. A double-bottom pattern typically forms after an asset has fallen to a new low, followed by a brief recovery and a second dip that doesn’t drop below the first. This creates a “W” shape, signaling that the asset has found strong support at the lower price point, and is now positioned for an upward breakout.

In Cardano’s case, the $0.324 support zone has become the key battleground for bulls and bears alike. Over the past week, Cardano broke below the $0.331 support level twice, confirming a bearish trend that saw prices drop from $0.358 to a low of $0.326. However, a modest recovery has followed, with the price showing a 1.23% uptick, signaling the potential for a reversal from the $0.324 zone.

Technical Indicators Strengthen Bullish Case

Several key technical indicators suggest that ADA might be on the verge of a bullish reversal. The first notable sign is the completion of a morning star pattern, a classic bullish formation that often signals the end of a downtrend and the beginning of an upward move. The morning star pattern consists of three candles: a large bearish candle, a small-bodied candle indicating indecision, and a large bullish candle that closes near or above the midpoint of the first bearish candle. This pattern often serves as a precursor to upward momentum.

Additionally, the Relative Strength Index (RSI), which measures the speed and change of price movements, has begun to recover from the oversold zone. As of the latest analysis, the RSI is crossing above its 14-day simple moving average (SMA), signaling a potential shift toward bullish momentum. RSI readings above 30 are considered healthy, and the crossover suggests that the bearish pressure is easing.

Moreover, the Moving Average Convergence Divergence (MACD) and signal lines are also poised for a bullish cross, further supporting the notion of an impending reversal. If these indicators maintain their trajectory, they could provide the technical strength needed for Cardano to break out of its current consolidation phase.

Key Levels to Watch for a Breakout

While the current setup may look promising for Cardano, traders should pay close attention to specific price levels that will likely determine the next move. The $0.324 support zone remains critical—if ADA can hold above this level, the likelihood of a bullish reversal increases significantly. However, if the price falls below $0.324, the bears could take control, pushing the price toward $0.315 or even the psychologically significant $0.30 level.

For those looking to capitalize on the potential reversal, the first target for a breakout is $0.332. A clean break above this level would be a bullish confirmation, triggering further upward movement. According to the Fibonacci retracement levels, the first resistance target to watch is at $0.343, which corresponds to the 23.6% Fibonacci level.

Should the price continue its upward trajectory, the 50% retracement level at $0.364 could come into play, representing a key area where Cardano might face significant resistance. However, if the bullish momentum persists, ADA could target higher resistance levels at $0.39 and $0.41, which correspond to the 78.6% and 100% Fibonacci levels, respectively.

Possible Bearish Scenarios

Despite the bullish signals, traders must also consider the possibility of a downside move. If Cardano fails to maintain support at $0.324, the price could retrace further, testing the next support levels at $0.315 or even $0.30. A breakdown below these levels would likely invalidate the bullish case for Cardano, potentially sending the price back into a deeper correction.

The broader cryptocurrency market’s performance could also influence Cardano’s price action. While ADA has shown some signs of resilience, it’s important to remember that macroeconomic factors and market-wide sentiment can quickly shift, impacting all assets within the space. Should the overall market sentiment remain weak, even strong technical signals may not be enough to push Cardano into a sustained rally.

Conclusion: Will Cardano Reach $0.41?

As Cardano tests critical support at $0.324, the possibility of a double-bottom reversal remains on the table. Technical indicators such as the morning star pattern, RSI recovery, and MACD crossover all point toward the potential for a bullish move. If Cardano can successfully break above $0.332 and target higher Fibonacci resistance levels, the price could rise to $0.41 or even higher.

However, the market is unpredictable, and traders should remain cautious. A failure to hold the $0.324 support zone could lead to further downside, with the possibility of retesting the $0.30 psychological level. As always, investors should carefully monitor these key levels and be prepared for both bullish and bearish scenarios.

Cardano’s price action over the coming days will be crucial in determining whether it can break free from its current consolidation and embark on a new upward trend, or if it will fall into a deeper correction phase. The coming days will undoubtedly be crucial for ADA, as it navigates the critical support zones that could dictate its next major move.