The sell-off in the cryptocurrency market intensified over the weekend, with major assets extending their weekly losses. Cardano (ADA) was significantly affected, experiencing heightened selling pressure and triggering a “death cross” signal on its short-term charts.
A death cross, indicating bearish momentum, occurs when the short-term moving average crosses below the long-term moving average. For Cardano, this pattern appeared on the four-hour chart, as the 50-period moving average fell below the 200-period moving average. This signal suggests potential further declines for ADA.
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According to Santiment, historical data shows that the low seven-day average returns of traders for leading cryptocurrencies, including ADA, increase the likelihood of a rebound. The on-chain analytics firm also noted that when we observe such low seven-day average returns for leading cryptocurrencies like BTC, ETH, ADA, XRP, and others, the probability of a rebound significantly increases.
A relief rally for ADA could target the 50-day SMA at $0.397 and further at $0.43. A sustained breakout above the 200-day SMA at $0.50 could initiate a bullish recovery for Cardano, allowing it to escape its current trading range. Conversely, if the decline continues, Cardano may find support between $0.31 and $0.33.
At the time of writing, ADA has decreased by 3.5% over the last 24 hours to $0.3474 and by 15% for the week.
