A sudden spike in the price of ADA, Cardano’s native cryptocurrency, is generating news. The most recent daily chart illustrates the intense conflict between ADA and a key technical indicator, the 200 Exponential Moving Average (EMA).
Many investors and enthusiasts are watching market movements closely to see if this digital asset will overcome this critical barrier and achieve success.
A common technical indicator used by traders to ascertain an asset’s general trend is the 200 EMA. Historically, a bullish phase has been observed in assets trading above this line, and a bearish phase has been observed in those trading below.
According to the most recent data, ADA appears to be fighting this line, suggesting that the cryptocurrency may be approaching a critical juncture. After a rather long slump, ADA may be about to make a bullish turn if it can close above the 200 EMA and hold its position.
Even while the recent price increase is obviously good news for ADA investors, there are other components of the chart that need to be taken into consideration. Interestingly, throughout this upward price movement, there was less trading activity, as seen by the declining volume profile.
A rising asset supported by rising volume is usually a stronger indication of a bull market because it represents a wider consensus. On the other hand, an upward trend on declining volume might indicate that there isn’t much support for the move and that it could not last long.
The Relative Strength Index (RSI), which has reached a value of 79, raises more questions. An RSI reading of more than 70 is typically seen as overbought, indicating that a pullback or consolidation may be in order for the asset. Traders should proceed with caution as ADA’s RSI is approaching 80, a sign that the asset may be short-term overextended.
