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Cardano’s native cryptocurrency ADA is making headlines with an unexpected surge in its price. The latest daily chart shows ADA’s fierce battle with an important technical indicator: the 200 exponential moving average (EMA).
As traders and enthusiasts examine the market moves, many are eagerly waiting to see if this digital asset can surpass this crucial level and secure a breakthrough.
The 200 EMA is a popular technical indicator used by traders to determine the overall trend of an asset. Historically, assets trading above this line are considered a bullish phase, while those trading below are in a bearish phase.
According to the latest data, ADA appears to be struggling with this line, indicating a possible turning point for the cryptocurrency. If ADA manages to close above the 200 EMA and maintain its position, it could mean a bullish reversal after a relatively long downtrend.
While the recent price surge is certainly positive news for ADA holders, there are other aspects of the chart that deserve attention. In particular, the falling volume profile indicates reduced trading activity during this upward price movement.
Typically, a rising asset supported by increasing volume is a stronger bullish signal as it reflects a broader consensus in the market. Conversely, an uptrend with decreasing volume could suggest that the move lacks substantial support and could be short-lived.
Adding to the concerns is the Relative Strength Index (RSI), which has reached a value of 79. Generally, an RSI value above 70 is considered overbought, suggesting that the asset could undergo a pullback or consolidation. With ADA’s RSI approaching 80, traders should proceed with caution as this indicates that the asset could be overextended in the near term.
