Date: Tue, May 20, 2025 | 09:36 AM GMT
After experiencing sharp volatility over the past three days, the cryptocurrency market is showing renewed strength. Bitcoin (BTC) has reclaimed the $105,000 mark, and Ethereum (ETH) is up more than 5% today—pushing major altcoins higher alongside it.
Cardano (ADA) is also in green today with monthly gains of 17%, and now a key breakout is being retested — suggesting that another bounce back might be on the horizon.
Retesting the Cup and Handle Breakout
On the daily chart, ADA has formed a textbook Cup and Handle pattern — a classic bullish setup that typically signals a trend reversal and continuation to the upside.
After rounding out a solid base and forming the “cup,” ADA pulled back to create the “handle,” briefly dipping to a low near $0.64. It then found support at the 100-day moving average, and managed to break above the neckline resistance around $0.74, confirming a bullish breakout.
This breakout rallied ADA to a local high of $0.86, but as often happens after such moves, profit-taking set in. The token retraced approximately 15%, revisiting the breakout zone between $0.71–$0.74, which is now acting as a critical support zone.
What’s Next for ADA?
In this current retest, ADA is showing encouraging signs of strength. If bulls can continue to defend this key support area and trading volume increases, the uptrend could be reignited.
A successful hold and bounce from this zone would suggest the breakout remains intact. If ADA breaks above $0.86 in the coming days, it could confirm the next leg up. Based on the measured move from the height of the Cup and Handle formation, the next bullish target could be around $0.98 — a potential 35% gain from current levels.
However, traders should stay cautious. A breakdown below the $0.71 support and its 100-day moving average (currently around $0.718) could invalidate the bullish setup and open the door for further downside — possibly back toward $0.65 or lower.
ADA’s next move may also depend on broader market sentiment. In particular, Ethereum’s momentum is playing a key role across altcoins. If ETH continues its recovery, ADA and others could benefit from the positive spillover. Conversely, if ETH loses steam, ADA may struggle to maintain upward pressure.
Disclaimer: This article is for informational purposes only and not financial advice. Always conduct your own research before investing in cryptocurrencies.
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