Cardano (ADA) saw a remarkable 60% surge following news that it would join the US crypto reserve, pushing its value over $1.10. This surge generated significant bullish momentum, with indicators like BBTrend and DMI confirming the strength of the uptrend.
Despite the initial excitement, ADA has slipped below $1, with technical signs indicating growing selling pressure. As traders ponder ADA's ability to maintain its gains or undergo further corrections, the support and resistance levels will be crucial in determining its next moves.
Following its entry into the US crypto reserve, Cardano experienced a surge thanks to high demand. ADA's BBTrend indicator swiftly soared from -14.5 to 7.1, depicting a momentum shift in a short span.
The BBTrend, a gauge derived from Bollinger Bands, aids in assessing price movements' direction and strength. When the indicator surpasses zero, it suggests a bullish trend, while dips below zero hint at bearish momentum. Extreme values, like below -10 or above 10, often precede corrections.
ADA's BBTrend, which peaked at 7.1, has since retreated to -13.4, indicating waning enthusiasm surrounding its US crypto reserve inclusion.
The dip signals weakened bullish momentum, with ADA likely poised for consolidation or retracement. This decline typically aligns with hefty selling pressure, potentially leading to further declines unless fresh buying emerges. Stabilization may be indicated by a BBTrend reversal toward neutral territory.
Cardano's trend strength has notably increased, evident in its Directional Movement Index (DMI). The Average Directional Index (ADX) spiked from 28.3 to 43.7 post the US crypto reserve announcement, indicating robust trend development.
A rising ADX above 25 signifies a strengthening trend, with over 40 showing a potent and sustained movement, whether bullish or bearish. The ADX measures trend intensity, aiding in gauging whether a trend may persist or weaken.
ADA's high ADX, coupled with decreasing +DI and increasing -DI, reveals a strong yet waning bullish trend. If this trend persists, ADA might face further retracement or consolidation unless buyers regain control.
After soaring past $1.10, ADA has retraced to around $1, following initial frenzy. DMI and BBTrend indicators hint towards a potential loss of momentum and the chance of a deeper retreat if selling pressure escalates.
Should ADA fail to maintain current levels and pressure mounts, a test of the $0.90 support is likely. A breakdown could extend declines to $0.81 and $0.65, possibly driving ADA as low as $0.50.
Conversely, renewed bullish impetus could push Cardano towards $1.16 resistance. Breaking through could signal a move to $1.32, the highest level since early December 2024.
ADA's future trajectory hinges on trader response to recent movements and whether fresh buying can counter emerging selling pressure.