Key Takeaways:
- Cardano (ADA) gains nearly 20% in value .
- Sell-off fears intensify as the upside move could be a dead cat bounce.
- Several crypto analysts agree with the short-term bearish prognosis.
YEREVAN (CoinChapter.com) – ADA, the native token of the seventh-largest cryptocurrency Cardano, saw 20% intraday gains, the highest soar in the top 10 cryptos. The ADA/USD exchange rate climbed to $0.57 in the European session Friday, albeit flashing conflicting technicals on the charts.
Cardano (ADA) gains big.
The digital asset caught the ubiquitous Bitcoin (BTC)-led recovery wave after bottoming out at $0.4 on May 12. Additionally, ADA sought support from a former resistance trendline, which could solidify the bullish claim.
Also read: Cardano’s (ADA) downtrend leads to a 28% fall in its prices.
However, the broader market conditions, the Fed’s quantitative tightening policy, and the continuous war in Ukraine could put a damper on Bitcoin bulls’ aspirations. As a result, ADA could join the march and decline alongside other leading cryptos if the bearish scenario plays out.
ADA in a dead cat bounce?
Furthermore, during the previous week’s crash, the trading volumes were building up a strong panic-sell wave, and the green bar on May 13 was far less substantial. Thus, it might not suffice to overpower the sell-off incentive, taking the Cardano token’s value down.
Moreover, the recent upside move was insufficient to convince the trend-based indicators. The MACD histogram printed red bars, while the relative strength index (RSI) bobbed around the ‘low expectation’ territory.
Also read: Cardano (ADA) holds a rebound level amid Ledger 4.0 upgrade.
Bearish verdict
A crypto analyst with a Twitter handle, CryptoCapo agreed with the ‘dead cat bounce’ prediction, tweeting an update on his May 9 prediction. The analyst’s chart forecasted a drop to the $0.3 support as ADA’s next move.
CryptoCapo also offered a “counter scenario” in the comments, asserting that a “reclaim of the 0.80 level on a high timeframe would be one of the invalidations” for the bearish prediction.
Also read: Bitcoin week ahead Ep21: Focus shifts on inflation data as BTC eyes $30K next.
Michael Van de Poppe, the chief executive of consulting firm Eight Global, agreed with the mentioned price target. Notably, he asserted that “the next support around $0.38-0.40 is the one the markets bounced from.”
Also read: Bitcoin (BTC) loses support and falls below $36K; where are the whales?
Solid predictions are hard to make based on ADA charts alone. Like any other cryptocurrency in the turbulent market, Cardano depends on more prominent players like Bitcoin, the U.S. dollar, the inflation statistics, etc. Thus, it is crucial to watch the crypto segment as a whole, and the broader economic conditions, to better determine the most profitable market entry and exit points.
