Cardano (ADA) has experienced notable fluctuations in its price action over recent months, which have left many investors wondering about its potential for growth. After a 72% rally in early March, driven by the declaration that the U.S. crypto strategic reserve would include Cardano, ADA has seen a substantial retracement, bringing it back to familiar price zones. Despite this, some market analysts believe that ADA could be primed for a rally towards the $1.2 mark. However, this potential path remains complicated by market uncertainty and a lack of consistent buying pressure.

Price Action and Market Structure

Since December 2024, Cardano has been trading within a narrow range, which has restricted its ability to break out. Despite the strong price surge in early March, ADA has failed to sustain its momentum, retracing a majority of the gains. At the time of writing, ADA was trading within a critical support zone, which had previously acted as a resistance level in February. For short-term traders, this may present a potential buying opportunity.

Cardano’s recent price action suggests that it may continue trading in a range-bound fashion for the near future. The Directional Movement Index (DMI) has highlighted a strong uptrend, with both the Average Directional Index (ADX) and the +DI above 20, signaling that the underlying market trend remains bullish. However, the On-Balance Volume (OBV) indicator has failed to break out of its range formation, suggesting a lack of consistent buying pressure. This indicates that Cardano may remain confined to its current range unless there is a surge in volume or a catalyst to ignite sustained buying activity.

Support at $0.78 and Resistance at $1.2

The $0.78 level has become an important support zone for ADA, and it’s likely to see a bounce towards the $0.9 region in the coming week. This support has been retested several times, and its significance cannot be overlooked. If buyers manage to hold this level and push prices higher, the next key target will be the $1.2 resistance zone. This price level has been identified as a critical point by the liquidation heatmap, and it’s where ADA has historically faced significant challenges in making a breakout.

Despite the resistance at $1.2, bulls will be eyeing the possibility of a breakout above this zone. However, the liquidity cluster around $1.2 has consistently led to price rejections, indicating that pushing through this resistance may not be an easy task. If ADA manages to break through, it could trigger a cascading liquidation event that propels the price higher, but this requires a surge in buying volume that has yet to materialize.

Liquidity Clusters and Potential Bounces

The liquidation heatmaps for both the three-month and two-week time frames highlight key areas of interest for traders. In the short term, liquidity pockets at the $0.78-$0.8 range remain significant. Should ADA dip back to this level, a strong bounce to $0.9 is expected. The density of liquidations around $0.78 further supports the idea that this level could act as a strong support zone in the near future.

However, the path to sustained growth and a move toward $1.2 depends largely on broader market conditions, including the behavior of Bitcoin (BTC) and overall sentiment in the cryptocurrency market. Bitcoin’s price action continues to influence the altcoin market, and any negative movements in BTC could put additional pressure on ADA’s price.

Conclusion

Cardano has the potential to defy market uncertainty and reach $1.2, but several challenges remain. ADA’s price action has been largely range-bound, with the support at $0.78 and resistance at $1.2 providing clear technical boundaries. While the market structure remains bullish, the lack of persistent buying pressure, combined with the challenges posed by liquidation zones, means that ADA’s path forward is not without hurdles.

In the short term, a move towards $0.9 is likely, with $1.2 being the next significant target. However, any sustained rally will require a shift in market sentiment and an increase in buying volume, which has been absent in recent weeks. For now, Cardano’s journey to $1.2 remains uncertain, but its position in the market shows that there are still opportunities for patient investors.