- A “death cross” on Cardano’s (ADA) hourly chart, typically a bearish signal, was unexpectedly followed by a price rebound.
- ADA bounced from $0.536 and is currently trading around $0.564, showing resilience.
- This suggests strong “buy the dip” sentiment among traders, counteracting the bearish technical indicator.
- The recent SEC approval of Grayscale’s Digital Large Cap Fund (GDLC), which includes Cardano, adds a positive long-term catalyst.
- Short-term focus for ADA remains on breaking above its 50 and 200 hourly moving averages to sustain upward momentum.
Cardano Unconventional Rebound: Defying the Death Cross
In a surprising turn of events, a “death cross” recently appeared on Cardano’s (ADA) hourly chart. This technical pattern, formed when a short-term moving average (typically the 50-hour MA) crosses below a long-term moving average (like the 200-hour MA), is usually a precursor to sustained bearish momentum. However, Cardano decided to write its own script.
Instead of plunging further, ADA demonstrated remarkable resilience, rebounding from lows of $0.536 to climb towards its hourly 50 and 200 moving averages, currently at $0.559 and $0.565 respectively. This unexpected reversal suggests a strong “buy the dip” mentality among traders, indicating that the market is not fully convinced by the bearish signal.
Also Read: Cardano Price Prediction: ADA Eyes a 60% Surge Despite Ecosystem Woes
Understanding the “Death Cross” and ADA’s Deviation
While a death cross on an hourly chart is less significant than those on daily or weekly timeframes, it still sets a short-term tone for market sentiment. Its appearance usually signals a weakening of short-term momentum compared to the long-term trend, often leading to further price depreciation.
Cardano’s divergence from this typical pattern is noteworthy. The quick bounce back towards its moving averages implies that bulls are actively working to invalidate the bearish signal, aiming to regain control of the short-term price action. This behavior underscores a deeper underlying demand for ADA, even in the face of traditionally negative technical indicators.
What’s Fueling the Rebound?
At press time, ADA was up 2.02% in the last 24 hours, trading at approximately $0.564. This rebound follows two consecutive days of drops earlier in the week, largely attributed to profit-taking after ADA reached a high of $0.591 on Monday. The immediate recovery suggests that market participants are viewing these dips as accumulation opportunities rather than a reason to exit their positions.
One significant development that could be contributing to this optimistic outlook is the recent news regarding Grayscale’s Digital Large Cap Fund (GDLC). The SEC has cleared GDLC to become a spot crypto ETF, a move that is broadly positive for the crypto market, especially for assets included in the fund. Cardano is one of the key holdings in GDLC, alongside Bitcoin, Ethereum, XRP, and Solana. This regulatory approval provides a layer of institutional validation and could lead to increased investment inflows into ADA.
The Road Ahead for Cardano
In the immediate future, traders will be closely monitoring whether ADA can decisively move and sustain itself above its hourly 50 and 200 moving averages ($0.559 and $0.565 respectively). A successful breakout above these levels would be a strong indication of continued bullish momentum, potentially pushing the price beyond $0.60. Conversely, if ADA fails to hold these levels, support at the recent low of $0.536 might be retested.
The unconventional reaction to the hourly death cross, coupled with the positive news surrounding the Grayscale ETF, positions Cardano in an intriguing spot. While short-term volatility remains inherent in the crypto market, ADA’s ability to defy a traditionally bearish signal highlights a potential underlying strength and growing investor confidence.
