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The crypto market sell-off deepened over the weekend with major crypto assets extending their weekly losses.
This broader market downturn has impacted numerous digital assets, with Cardano being no exception. The increased selling pressure has pushed ADA's price down, triggering the emergence of a death cross signal on its short-term charts.
Tomiwabold OlajideA death cross occurs when a short-term moving average crosses below a long-term moving average, signaling bearish momentum.
In the case of Cardano, this pattern has appeared on the four-hour chart, where the 50-period moving average has fallen below the 200-period moving average. This crossover is traditionally seen as a bearish signal, suggesting that the cryptocurrency may face further declines.
What's next for ADA price?
At the time of writing, ADA was down 3.42% in the last 24 hours to $0.3585 and down 13% weekly. Cardano has noticeably declined since July 27 after reaching highs of $0.43. Since this date, ADA has marked five out of seven days in losses.
Market analysts are closely monitoring key support levels to assess the potential for a price rebound for ADA. Other crucial technical indicators would also be watched to determine the Cardano price trend.
The coming days might be crucial in deciding whether ADA can stabilize and recover or if the bearish trend will persist.
According to Santiment, history depicts bounce probabilities for ADA as seven-day average trader returns reach fresh lows. In a tweet, Santiment wrote: "Crypto markets have retraced across the board, leaving traders calling for sub-$50K BTC once again. However, history shows that when we see such low 7-day average trader returns for top caps like BTC, ETH, ADA, XRP, DOGE, and LINK, bounce probabilities rise significantly."
A relief rally for ADA might target the daily SMA 50 at $0.397 and further at $0.43. A sustained breach above the daily SMA 200 at $0.50 might kickstart a bullish comeback for Cardano while allowing it to escape its current trading range.
On the other hand, if declines perpetuate, Cardano might eye its next support in the range between $0.31 and $0.33.
Arman Shirinyan
Alex Dovbnya
Dan Burgin