On the daily price chart of Cardano’s ADA token, a rival to Ethereum, a technical analysis pattern known as “death cross” has surfaced. When the 50-day simple moving average (SMA) falls below the 200-day SMA, a death cross occurs.Technical analysis enthusiasts view the death cross as a sign that the market is likely to crash. ADA’s 50-day and 200-day SMAs crossed negatively over the weekend, confirming the first death cross since December 2021, according to trading tool TradingView.
Backward-looking and seen as untrustworthy as lone indicators, moving average crossovers.Nevertheless, the most recent death cross is in line with the gloomy regulatory prognosis for ADA and alternative cryptocurrencies (altcoins) in general.The SEC designated a number of tokens, including ADA, as securities in its action against Binance, which drew the attention of cryptocurrency traders earlier this month.
IOG, a Cardano development company, swiftly denied the SEC’s assertion.ADA nevertheless encountered selling pressure and has lost 30% of its market value this month, the largest monthly loss since March 2022. The sell-off is likely the result of worries that ADA would face more stringent regulatory scrutiny if classified as a security device.According to Matt Hu, CEO of cryptocurrency asset management company Blofin, “if the SEC ultimately prevails (which may take several years or even a decade), altcoin issuers and liquidity providers will face unprecedented difficulties.”
The regulatory risk, according to Hu, is “mainly concentrated on investors in altcoins, which has a limited impact on holders who only hold BTC and ETH.”According to CoinDesk data, ADA was traded for $0.26 at the time of publication. On the mainnet of the blockchain early on Tuesday, Cardano published the Node version 8.1.1 with the intention of speeding up network operations by minimizing epoch transitions, or intervals of time on the blockchain.