From July 14th to August 17th, Cardano (ADA) experienced a 39% decline, dropping from $0.380 to $0.231 and forming a price range.
ADA Price Trend, Source: TradingView.
Currently, ADA is trading at $0.245 and has created three distinct lower lows over the past month.
However, the Relative Strength Index (RSI) and the Awesome Oscillator (AO) have generated higher lows.
This inconsistency is known as a bullish divergence, which often leads to an explosive upward movement in the asset.
As a result of this potential breakout, ADA price could rise by 18% and reach the level of $0.289. In certain scenarios, ADA may mark the midpoint of the aforementioned range at $0.306, resulting in a total gain of 25%.
With a highly bullish scenario and patient ADA holders, ADA price could potentially reclaim the 200-day Exponential Moving Average (EMA) at $0.314, bringing a 28% increase.
ADA/USDT 1-day Chart, Source: TradingView.
Although the bullish prospects for ADA price are logical, the continuation of the downtrend will hinder the bullish divergence.
If there is a decisive breakthrough below the range low of $0.231, creating even lower lows, the bullish argument would be invalidated.
Such a deterioration could lead to a 7% decline in ADA price, revisiting the volatile low of $0.214 on June 10th of this year.
