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Cardano (ADA) experienced a ‘Death Cross’ over the weekend, a bearish technical signal indicating potential downward price movement and an impending decline.
This development follows the U.S. Securities and Exchange Commission (SEC) filing a lawsuit against Coinbase two weeks ago, which identified ADA as a security in the proceedings.
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- The Death Cross is identified when an asset’s 50-day simple moving average dips below its 200-day moving average.
- As per TradingView, nearly all of Cardano’s moving average indicators are currently showing a “sell” signal. The last occurrence of a death cross for this asset was in December 2021, marking the beginning of a year-long downtrend for both Cardano and the broader cryptocurrency market.
- Subsequently, the asset signaled its counterpart, a ‘Golden Cross,’ in March, coinciding with a surge of investment into Bitcoin and other digital currencies triggered by the collapse of several banks.
- While the death cross is often deemed unreliable on its own, it coincides with the SEC’s legal actions against two major cryptocurrency exchanges, Binance and Coinbase.
- In the Coinbase lawsuit, ADA was categorized as a security along with several other cryptocurrencies, many of which have experienced significant declines since the case was initiated. Following this, ADA has dropped approximately 30%, currently trading at $0.25 each.
- The sustained pressure on altcoins has resulted in an increase in Bitcoin’s dominance this month, which regained 50% on Monday for the first time since 2021. Bitcoin billionaire Michael Saylor has suggested that the regulatory actions against competing cryptocurrencies could eventually elevate Bitcoin’s dominance to over 80% in the long run.
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