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Cardano (ADA), the ninth largest cryptocurrency by market capitalization, recently completed its first golden cross of 2024.
The golden cross occurs when a short-term moving average (usually the 50 SMA) crosses above a long-term moving average (often the 200 SMA) and is seen as a bullish signal, indicating potential upward momentum for the cryptocurrency.
In the case of Cardano, the 50-day moving average has crossed above the 200-day moving average, confirming a golden cross, indicating that the short-term price momentum is outperforming the long-term.
This would be Cardano's first golden cross in 2024; the previous one occurred in November 2023, and prices increased four months later to a high of $0.81.
Cardano's latest golden cross coincides with a price reversal following an eight-month downturn, in which the ADA price plummeted shortly after reaching highs of $0.81 in mid-March this year. ADA saw a huge price increase, reaching new yearly highs of $0.8199 on Nov. 17.
What's next for ADA price?
At the time of writing, ADA was up 4.52% in the last 24 hours to $0.747, down from an eight-month high of $0.8199 reached in Sunday's trading session, albeit up 26% weekly.
Cardano has marked 12 out of 14 days in the green since Nov. 5, when it started rising as Bitcoin's strong price performance boosted altcoin momentum, with ADA benefiting.
While the golden cross is a bullish signal, the question remains — how much higher can ADA go? Several scenarios might play out. First, ADA could maintain its current bullish momentum and challenge major resistance levels. A move above $0.82 and beyond $1 might lead to more gains.
ADA may enter a period of sideways movement as investors await confirmation of further bullish catalysts. On the other hand, ADA might retreat, with the golden cross trapping traders on the wrong side of the market. If this happens, support is envisaged at $0.68 and $0.61 in the very short term.
It should, however, be borne in mind that the golden cross is not an ultimate signal, and broader market conditions and macroeconomic developments may have an impact on ADA's performance in the coming days.