Cardano (ADA), the ninth-largest cryptocurrency by market capitalization, is showing signs of a price reversal following a strong rebound that propelled it above two critical technical levels — the 50-day and 200-day Simple Moving Averages (SMAs). The daily SMA 50 at $0.669, in particular, has acted as resistance for the ADA price since late December.
Over the past several months, Cardano's price action has been a complex interplay woven around the daily SMA 50 and 200. Back in late November, ADA managed to rise above the 50-day SMA after spending months trading below both it and the 200-day SMA. A breakout ensued, with ADA reaching highs of $1.24 in early December 2024; however, it proved short-lived.
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As profit-taking followed in the same month of December, ADA dipped below the 50-day SMA once again. Still, it managed to hold the daily SMA 200 level as support. But repeated attempts to reclaim the 50-day SMA in January and March were rejected, showing strong resistance and declining bullish momentum. The situation worsened when the 200-day SMA flipped from support to resistance in late March amid the broader crypto market drop.
Cardano reverses course
At press time, Cardano was up 9.54% in the last 24 hours to $0.79 and up 9.25% weekly amid the broader crypto market rally that has seen Bitcoin surge past $104,000.
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The recent rebound has not only caused Cardano to return above the 50-day SMA; Cardano rose above the 200-day SMA at $0.783 — a move that has not occurred in weeks. This technical development suggests that a trend reversal may be in play.
However, the true test lies ahead. Whether Cardano can sustain momentum above the 200-day SMA will be key in determining if this rally has staying power or is simply another temporary spike. Traders and analysts will be watching closely in the coming days for confirmation signals.
If the rally is sustained, ADA may target $1 next. On the other hand, a drop may cause ADA to return to trade between its daily moving averages of 50 and 200.
