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Cardano (ADA), the 10th-largest cryptocurrency by market capitalization, is proving the bears wrong, at least for the time being. After creating a dreaded death cross on its weekly chart in late June, which is commonly regarded as a sign of sustained bearish momentum, ADA has made a surprising comeback. Instead, Cardano has surged 42% in July, defying the bearish crossover.
A death cross happens when a shorter-term moving average, usually the 50-day or 50-week MA, falls below a longer-term moving average, like the 200-day or 200-week MA. It is often seen as a bearish signal, frequently indicating deeper corrections or extended downtrends.
An unusual twist occurred when, after the bearish technical pattern, Cardano began to rally rather than decline further.
Cardano embarked on an uptrend in the last week of June, as the broader altcoin market gained momentum, resulting in four weeks of consecutive rises.
The surge culminated in a high of $0.935 on July 21, when the price met resistance. Despite this, ADA remained up 42% in July, according to TradingView data.
What's next for ADA price?
At press time, ADA was down 0.23% in the last 24 hours to $0.807, and down 5.13% weekly, erasing its seven-day gains during the latest crypto market sell-off.
Cardano has created a bearish death cross on its hourly chart, signaling that the bears are attempting a short-term return.
If the price falls from its current level, ADA could decline to $0.74 (the daily SMA 200) and then to $0.70, or the daily SMA 50 at $0.66. To regain control, buyers must raise the price above $0.86. If they do this, ADA may rise to $0.90 and then to $0.94.
The bulls will attempt to test the overhead resistance of $0.94. If the level is crossed, ADA may increase to $1.02, and later to $1.17.
Vladislav Sopov
U.Today Editorial Team