Cardano’s ADA price eyes 30% rally with a potential ‘triple bottom’ setup

Cardano (ADA) may rally by nearly 30% in the coming days as it forms a classic bullish reversal pattern.

Sharp ADA rebound underway

Dubbed “triple bottom,” the pattern typically occurs at the end of a downtrend and consists of three consecutive lows printed roughly atop the same level. This means triple bottoms indicate sellers’ inability to break below a specific support level on three back-to-back attempts, which ultimately paves the way for buyers to take over.

In a perfect scenario, the return of buyers to the market allows the instrument to retrace sharply toward a higher level, called the “neckline,” that connects the highs of the previous two rebounds. The move follows up with another breakout, this time taking the price higher by as much as the distance between the pattern’s bottom and neckline.

So far, ADA’s price has been able to paint the triple bottom halfway, now rebounding after forming the third low, as shown in the chart below.

ADA/USD 4-hour price chart featuring triple-bottom setup. Source: TradingView

The point at which ADA’s price reversed was accompanied by a rise in trading volume, suggesting that the rebound had enough backing from buyers. Therefore, Cardano’s token looks poised to at least pursue a run-up toward $1.40.

Moreover, if the price further breaks above the neckline level decisively, it will likely continue to rally until it hits $1.63 — as per the triple bottom scenario.

Accumulation area

The potential triple bottom scenario emerged after ADA’s price plunged by more than 60% from its record high of $3.16 achieved on Sept. 2 earlier this year. It also surfaced as the Cardano token became one of the worst performers quarter-to-date, dropping nearly 45.50% compared to its top rival Ether’s (ETH) 15% gains.

ADA’s multi-month selloff pushed its daily relative strength index (RSI), a momentum indicator, into oversold territory. In addition, ADA’s price drop also led it to what appears like a dependable “accumulation area,” as shown in the chart below.

ADA/USD daily price chart featuring accumulation area and oversold RSI. Source: TradingView

Both RSI and the…

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