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Is Cardano (ADA) Golden Cross Useless? Price's Reaction

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Fri, 17/11/2023 - 12:52
Is Cardano (ADA) Golden Cross Useless? Price's Reaction
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Cardano (ADA) recently exhibited a golden cross, a technical chart pattern that is often interpreted as a bullish signal, where the 50-day moving average crosses above the 200-day moving average. However, despite this typically optimistic indicator, ADA has since entered a correction phase, losing a significant portion of its value. This development raises the question of the utility of the golden cross as an indicator in the current market context for ADA.

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The price dynamics of ADA have been influenced by several factors. After a period of upward momentum over the past month, ADA encountered a substantial resistance level, triggering a strong bearish response​​. This resistance and subsequent selling pressure hint at the potential for further declines. However, as ADA/USDT approaches critical support levels, there is also the possibility of a rebound if bullish sentiment persists​​​​.

Cardano chart
ADA/USDT Chart by TradingView

This recent reversal in ADA's price following the golden cross may reflect broader market consolidation trends. With significant selling pressure accumulating, the short-term outlook for ADA presents both bullish and bearish possibilities​​. 

The pivotal support level to watch is $0.368, aligning with the EMA 10. If ADA's price can sustain above this level, it may indicate the continuation of an uptrend. Conversely, a drop toward the EMA 50 at $0.31 could signal a weakening bullish stance and potential further correction​​.

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In this context, the recent golden cross may not be the bullish trigger that investors had hoped for, as market conditions and sentiment play a more significant role in ADA's price action than this single technical pattern. For a comprehensive analysis, investors should continue to monitor market trends, on-chain data and broader economic factors that influence the crypto market.

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