Cardano’s ADA Breaks Key Downtrend, RSI Shows Positive Movement
January 5, 2026
Cardano’s current price trend is approaching a critical juncture, with signs of improvement and a break in the downtrend indicating a potential focus on overcoming the $0.40 resistance level and moving towards higher price targets. Following a period of downward pressure, Cardano is now at a level that could signal a significant turning point. Momentum seems to be gaining strength, and observers are eager to see if this development leads to a broader recovery or fades like past rallies.
One indicator of a potential shift in momentum is the bullish divergence in Cardano’s Relative Strength Index (RSI), where RSI is forming higher lows while price has previously shown lower lows. This divergence suggests that selling pressure may be diminishing even before a breakout in price occurs. As ADA continues to test the $0.40 resistance, the presence of this bullish RSI divergence hints at a weakening downside momentum which has historically preceded trend reversals.
A more concrete signal of a structural change in Cardano comes from the break of a primary downtrend that had persisted since October 2025. The clear descending trendline that had previously impeded major rally attempts has now been breached, indicating a potential shift towards higher price targets. This breakthrough is viewed as significant, with projections suggesting that Cardano could aim for the $0.50–$0.60 range if the breakout is sustained.
On a longer-term horizon, there are indications of a broader pattern taking shape on higher timeframes, with ADA consolidating above long-term ascending support while price remains below descending resistance. Although projections point to a possible move above $1 under favorable market conditions, reaching higher price levels depends on factors such as confirmation, volume expansion, and market participation. Nonetheless, the presence of a higher-timeframe base strengthens the long-term outlook for Cardano.
In the year 2026, Cardano’s price potential hinges on the evolution of the current breakout attempt into a sustained trend rather than a short-lived rally. Reclaiming and holding above the $0.40–$0.42 zone would provide confirmation that the broader downtrend is transitioning into a recovery phase. Gradual progress towards the $0.50 to $0.60 region could be expected with continued acceptance above $0.40, while a stronger bullish scenario could see Cardano surpassing $0.60 and challenging higher resistance levels over time. While projections towards $1.00 and $2.00 are plausible, they would require consistent accumulation, enhanced liquidity, and confirmation across various timeframes.
As long as Cardano maintains its reclaimed structure and avoids dropping below crucial support levels, the possibilities for an upward trajectory remain viable. The recent price action reflects positive structural improvements, with indicators such as trendline breaks and RSI divergence pointing towards a potential shift in momentum. The focus remains on the $0.40 resistance level as a key determinant of Cardano’s future direction, whether towards a sustained uptrend or a return to consolidation.
