Analyst Signals Potential Reversal for Cardano as TD Sequential Flashes 'Buy' Signal

Cardano (ADA) has captured renewed attention from traders after prominent analyst Ali Martinez identified a TD Sequential buy signal on its weekly chart. This technical indicator, often used to spot trend exhaustion, has appeared following a prolonged period of decline that saw ADA's price fall from above $0.90 to a range between $0.37 and $0.41. Martinez emphasized that the signal suggests selling pressure may be waning, but its validity is strictly contingent on ADA maintaining support above the critical $0.37 level.

The $0.37 level is identified as a crucial support zone, aligning with a key Fibonacci retracement level and an area where buyers have previously stepped in. Recent price action, characterized by candles with long lower wicks, indicates demand is beginning to absorb supply. Should ADA hold above this support, the next significant resistance to watch is around $0.54, which corresponds to the 0.618 Fibonacci retracement of the larger downtrend.

Zooming out, the broader analysis reveals Cardano is in a long-term structural compression phase, with its current multi-year correction mirroring patterns seen prior to its 2020 expansion. Despite the price decline from above $0.90 to current levels near $0.4086, market positioning data shows sustained trader optimism and neutral-to-positive funding rates, suggesting a misalignment between sentiment and price action. Analysts project long-term upside targets between $4.88 and $5.50 based on historical cycle math, contingent on the asset completing its consolidation phase and rebuilding internal demand strength.

While the weekly TD Sequential signal opens the door for a potential bounce, analysts caution that Cardano remains in a technical downtrend of lower highs and lower lows. Confirmation of a reversal would require buyers to successfully defend the $0.37 support and for the price to begin posting higher weekly closes. A breakdown below $0.37 would invalidate the bullish setup and likely lead to further downside toward the mid-$0.30s.