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Cardano (ADA) Makes Surprising Reversal After Death Cross Formation

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Thu, 16/05/2024 - 12:55
Cardano (ADA) Makes Surprising Reversal After Death Cross Formation
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After a concerning five-day streak of declines, which coincided with the formation of a technical pattern known as the "death cross," Cardano's ADA has made a noteworthy rebound.

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ADA recovered from a low of $0.426 on May 15; the gains continued until press time, with ADA rising 5.38% in the last 24 hours to $0.455.  

This upward movement comes as a welcome relief for ADA holders, who have been patiently waiting for signs of a bullish reversal. Over the past weekend, Cardano's ADA's 50-day and 200-day simple moving averages (SMAs) crossed bearishly, resulting in a death cross formation.

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Cardano (ADA) Forms First 2024 Death Cross

Given the bearish outlook suggested by the death cross, ADA's recent rebound is noteworthy. Several factors may have contributed to Cardano's positive price performance post-death cross. 

TradingView
ADA/USD Daily Chart, Courtesy: TradingView

One significant aspect is the overall market recovery, where a slight improvement in the broader economic outlook has led to increased investor confidence across various asset classes, including cryptocurrencies.

Also, the anticipation of upcoming protocol upgrades likely played a role in bolstering investor sentiment. 

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Cardano Skyrockets 90% in Volume as ADA Price Makes Surprising Reversal

However, it remains yet to be seen if ADA's current rebound is a dead cat bounce or something that might metamorphose into a sustained rally for the cryptocurrency. In this regard, a break above the daily moving averages may be the first indication of strength.

Cardano awaits major upgrades

Ouroboros is the consensus protocol that powers the Cardano blockchain. Given Cardano's ongoing development and increasing use, Ouroboros has moved forward with its planned upgrade path.

Ouroboros's evolution will continue with Ouroboros Genesis, which is scheduled for release in the third quarter of 2024. Ouroboros Genesis is a set of improvements to the already robust Ouroboros protocol that include countermeasures to safeguard network nodes when they are new or return after an absence.

The first Genesis-capable implementation is expected for deployment in Q3, 2024. At this point, the most significant unknown is the level of optimization required to compensate for the increased peer count required to prevent eclipses.

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