Cardano Bullish Divergence Makes Case for Price Rebound

Cardano (ADA) has maintained a bullish structure while holding above key support levels, making a case for a strong reversal to the upside.

Cardano is down 3.4% since the start of the week and could print its third weekly red candle if the price stays at the current level. Yet the coin has sustained a bullish structure, with analysis hinting at a price recovery.

Key Point

• Cardano (ADA) is down 3.4% since the start of the week but has maintained a bullish structure above key support levels, with hints of a price recovery.
• ADA has an active bullish divergence in the 12-hour chart, a pattern that occurs when there is a divergence in the price behavior and the relative strength index (RSI)
• Adding to the optimistic outlook is Cardano’s trend above a key support area between $0.33 and $0.35.
• Holding this area opens the path for an ADA bounce towards higher levels.

Active Bullish Divergence

A TradingView analysis from CRYPTOMOJO identified this active bullish divergence in the 12-hour chart. For the uninitiated, this pattern occurs when there is a divergence in the behavior of prices and the relative strength index (RSI).

Between November 21, 2025, and January 1, ADA’s price made lower lows while its RSI made higher lows. Market observers often view this deferential trend as an indication of a downtrend’s exhaustion, particularly given the RSI’s strong momentum.

Cardano Bullish DivergenceCRYPTOMOJO shares a similar view, highlighting in the analysis that the bullish divergence remains active amid price consolidation. Notably, this structure usually precedes a price breakout to higher levels.

Cardano Holds Key Support Level

Adding to the analyst’s optimistic outlook is Cardano’s trend above a key support area between $0.33 and $0.35.

The accompanying chart shows that it first retested this long-standing demand area by mid-December, when it dropped to $0.34. Before December ended, ADA revisited this support two more times but recovered considerably at each event.

After failing to break above a descending resistance trendline in two attempts earlier this month, the cryptocurrency retraced to the key support area.

Meanwhile, this $0.33-$0.35 support has continued to prevent lower prices, and the analyst sees this as a bullish indicator. According to him, holding this area opens the path for a bounce towards higher levels.

How high? The chart set possible price targets of $0.42 and $0.47, aligning with the early January and December highs, respectively.

Invalidation Level and Key Caveat

The analysis also highlighted that this potential price increase would be nullified if Cardano breaks below the $0.33-$0.35 support range. Currently changing hands at $0.36, ADA would have to drop by 8.3% to fall below the zone’s lower band.

Even if this does not happen, there is still no guarantee that Cardano will rise higher as the crypto market looks weak. Understanding the risks involved is key to a more informed decision, as this is not financial advice.