Cardano Death Cross Emerges, But It’s Not What Was Expected

A death cross has recently formed on Cardano’s (ADA) hourly chart, which is often an indication of potential bearish momentum. Instead of falling further into the red, ADA flipped the script, rebounding from lows of $0.536 to rise toward its hourly moving averages of 50 and 200 at $0.559 and $0.65, respectively.

A death cross occurs when the short-term moving average (typically the 50-hour MA) falls below the long-term moving average (such as the 200-hour MA). While hourly death crosses are less significant than ones found on daily or weekly charts, they frequently set the tone for short-term sentiment.

However, in the case of Cardano, the price hit a bottom and reversed course, bouncing back toward levels aligned with its hourly moving averages.

This unusual price behavior suggests traders are not fully buying into the bearish signal. Instead, bulls may be seeking to invalidate the death cross by regaining control in the short term.

What’s next?

At press time, ADA was up 2.02% in the last 24 hours to $0.564, hinting at a rebound following two straight days of drops at the week’s start.

Cardano declined due to profit-taking after reaching a high of $0.591 on Monday, following a weekend rally. The bounce suggests that market participants may be buying the dip rather than running for the exits.

In the very short term, traders will closely watch whether ADA can decisively move above the hourly moving averages of 50 and 200 at $0.559 or $0.565 to sustain the current momentum past $0.60. If the price retraces, support might be tested at the recent low of $0.536.

In good news, the SEC has cleared Grayscale’s Digital Large Cap Fund (GDLC) to become a spot crypto ETF. The fund presently manages $755 million in assets, including Cardano, Bitcoin, Ethereum, XRP and Solana.

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