Cardano (ADA) has entered a period of consolidation after its impressive rally between July and August. While the momentum has slowed, indicators suggest that this pause could simply be a staging ground for the next upward move. With bullish sentiment still firmly present, market participants are watching closely for a potential breakout before the year ends.

Sideways Trading Signals Market Calm Before Potential Move

Cardano’s price action on the 4-hour chart indicates a controlled consolidation phase, rather than a breakdown. The cryptocurrency has been trading within a falling channel, consistently forming lower highs and lower lows. This structure often highlights seller fatigue and diminishing bearish momentum.

In recent sessions, ADA has approached the upper boundary of this channel, hinting that a reversal could be imminent. Traders often interpret such a move as the first sign of bullish pressure mounting beneath the surface, particularly when it aligns with improving on-chain and technical signals.

The Money Flow Index (MFI), a key volume-backed momentum indicator, has also offered a promising signal. After dipping into oversold conditions, it has now crossed above its descending trendline. This shift reflects growing buying pressure, suggesting that buyers are beginning to reassert control. If this continues, ADA could soon challenge the immediate resistance overhead.

Supertrend Resistance at $0.85: The Key Hurdle to Watch

Despite the encouraging signals, ADA is not out of the woods just yet. The Supertrend indicator shows a clear resistance level around $0.85, marked by the red signal line positioned above the current trading price. For the bullish narrative to gain full confirmation, Cardano must secure a strong close above this level and the upper boundary of the falling channel.

Should ADA break above this resistance zone, analysts expect a move towards $0.92, with extended targets stretching beyond the psychological $1 barrier. Crossing the $1 mark would not only represent a major technical victory but also boost investor confidence heading into the final quarter of the year.

Cup and Handle Formation Adds Fuel to Bullish Outlook

On the daily timeframe, Cardano is forming a classic cup and handle pattern, a bullish continuation structure often seen before significant upward surges. The ‘cup’ portion of the pattern reflects a rounded bottom, signalling that selling pressure has gradually eased as buyers slowly gained ground. This is followed by a short consolidation phase known as the ‘handle’, representing a brief pause before a potential breakout.

Patterns like this are closely monitored by experienced traders, as they tend to precede strong momentum-driven moves. The neckline of this formation sits around the $0.92 region, which perfectly aligns with the resistance highlighted on lower timeframes. A breakout above this neckline could trigger accelerated buying, placing $1.02 firmly in sight.

Chaikin Money Flow Signals Capital Re-Entering the Market

Further supporting the bullish scenario, the Chaikin Money Flow (CMF) has recently retested the zero line. While it had previously indicated outflows, the indicator’s attempt to cross back into positive territory suggests renewed accumulation. If CMF holds above this key threshold, it would serve as confirmation that capital is flowing back into ADA, strengthening the case for an upward move.

However, if CMF fails to sustain momentum and dips below zero once more, Cardano may remain locked in its current trading range between $0.77 and $0.82. In such a case, a breakout could be delayed, though the broader structure would remain intact as long as support levels continue to hold.

Outlook: Breakout Potential Remains Strong Despite Short-Term Caution

While consolidation phases often test investor patience, current technical structures on both the 4-hour and daily charts indicate that Cardano is not showing signs of trend reversal. Instead, the market appears to be preparing for a decisive move. Bulls have clear targets set at $0.92 and $1.02, while key support levels provide safety just below the handle structure.

If momentum indicators such as MFI and CMF continue to show improvement and ADA manages to close above $0.85, the chances of a breakout before year-end remain high. For now, patient accumulation and tactical positioning remain the strategy of choice for bullish traders eyeing the next major move in Cardano’s price trajectory.