Cardano's Current Cycle: 17,414% Rally Pattern Reemerging

The recent technical move in ADA has given bulls hope. Cardano is retracing patterns seen during its previous market cycle, when it experienced a remarkable rally of 17,414% between 2020 and 2021. Despite today’s correction, data suggests this cycle could be different. Currently, ADA is trading at $0.25, down 91.6% from its all-time high of $3.09.

What do technical indicators say about the current cycle?

Technical analyst Dan Gambardello’s recent research highlights a key similarity. The monthly Stochastic Relative Strength Index (RSI) has recently reached the same oversold level as before the 17,414% surge in the previous cycle. This indicator measures Cardano’s momentum and buying strength; when it hits such low levels, a rebound is expected.

Gambardello notes that the current RSI pattern closely resembles that seen in late 2019 and early 2020. However, a difference this cycle has is that Cardano’s fundamentals are stronger, providing a solid foundation for potential recovery.

Lessons from past cycles: what patterns are repeating?

A fascinating correlation has emerged between Cardano’s trend and the ISM Manufacturing PMI (Purchasing Managers’ Index). This index reflects the overall health of the manufacturing sector. During the last cycle, whenever PMI showed improvement, Cardano’s price also moved upward.

Until September, both indicators were closely aligned, but in February, PMI saw a significant rise. The ISM report indicated PMI increased to 52.4, signaling an expansion phase. Experts believe this cycle could mimic that movement.

During the 2020/2021 rally, when similar economic expansion conditions appeared, Cardano delivered substantial gains. Could we see the same pattern repeating in this cycle? While nothing is certain, the signs are positive.

Macro conditions: preparing for a new cycle

More importantly, the US Federal Reserve ended its aggressive monetary policy tightening (QT or Quantitative Tightening) in December 2024. This milestone could signal the start of a new cycle.

The last bull run also saw similar conditions. When the Fed eased its tightening, billions of dollars flooded into the markets, including the crypto sector, fueling price increases.

A similar scenario could unfold now. ADA has begun a correction phase after the Fed’s QT ended, just as seen in previous cycles. Once this correction completes, investors may once again flow into crypto.

How high could Cardano go?

Based on historical patterns, if ADA repeats its 17,414% rally, the price could surpass $45. That’s a huge number, but considering the 2020/2021 trend, it’s not entirely impossible.

More practically, analysts are focusing on targets like $10. This seems more achievable, though no guarantee exists.

What’s next: has a new cycle begun?

Cardano’s current cycle is intriguing. While a correction is ongoing, technical signals, economic indicators, and Fed policy improvements all point toward the possibility of a new cycle.

Looking at data and history, the coming years could be a significant cycle for Cardano. However, it’s important to remember that past performance does not guarantee future results.

Disclaimer: This information is for educational purposes only and not financial advice. The opinions expressed are personal and do not represent the official stance of Crypto Basic. Always conduct thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.