NOIDA (CoinChapter.com) — Cardano’s ADA token has pared all of its March gains since it started its downtrend on March 14. Despite the downtrend, crypto analyst Ben Armstrong, or ‘Bitboy Crypto,‘ has a bullish prediction for the Cardano token, with a potential $5 price label.
The recent ADA downtrend pushed the token’s price to $0.57 on March 20 before bulls started buying to defend the price level.
As a result, the ADA price painted a slight recovery, spiking nearly 6% to reach a daily high near $0.61.
Analysts’ Bullish Prediction For ADA Sees Price Reaching $5
Armstrong highlighted the launch of the USDM token, Cardano’s inaugural fiat-backed stablecoin, as a key driver that could help ADA recover.
Furthermore, the analyst stated that the USDM token could help enhance Cardano’s DeFi ecosystem, including it as a key driver in his bullish prediction. Additionally, Armstrong noted the DeJed protocol could be another bullish cue to attract more projects to the ecosystem.
DeJed is a decentralized stablecoin framework on Cardano that allows users to create algorithmically stabilized coins pegged to fiat currencies using smart contracts. However, developers’ response to the DeJed Protocol has been somewhat enthused, which could negate Armstrong’s bullish prediction.
Another key driver for ADA’s potential surge is the Hydra protocol. The off-chain scalability architecture aims to improve efficiency and transaction speed through off-chain transactions.
Apart from Armstrong, independent crypto analyst Ali Martinez also shared a bullish prediction for ADA. Armstrong cited Martinez’s prediction in his analysis, noting that Ali suggested ADA could consolidate between $0.55 and $0.8 before ascending towards $1.70, with a longer-term potential to hit $5.
Martinez based his prediction on a bullish fractal ADA has previously formed twice.
ADA Sees Potentially 67% Losses
While the analysts have their reason for bullish predictions, the ADA price seems not to agree with these forecasts. The Cardano token has formed a bearish technical pattern called the ‘Rising Wedge.’
The pattern forms when an asset’s price consolidates between upward-sloping support and converging resistance lines resembling a wedge. Declining trading volumes often accompany a breakdown below the pattern.
The price target of the pattern is equal to the height of the back of the wedge. If the token price breaks below the bearish pattern, it might fall to the theoretical price target of $0.2, a drop of over 67% from current levels.