Cardano’s ADA token has experienced an ominous-sounding technical analysis pattern called death cross on its daily price chart. A death cross occurs when the 50-day simple moving average (SMA) drops below the 200-day SMA, and is considered a warning that the market is about to head into a tailspin. According to charting platform TradingView, this is the first death cross since December 2021.
The recent death cross is consistent with the dour regulatory outlook for ADA and alternative cryptocurrencies (altcoins) in general. Crypto traders were caught off guard earlier this month when the U.S. Securities and Exchange Commission (SEC) classified a slew of tokens, including ADA, as securities in its lawsuit against Binance. Cardano development company IOG rejected the SEC’s claim, but ADA has still lost 30% of its market value this month, the most significant single-month decline since March 2022.
If the SEC ultimately prevails (which may take several years or even a decade), altcoin issuers and liquidity providers will face unprecedented difficulties, said Matt Hu, CEO of crypto asset management firm Blofin. Hu added that the regulatory risk is mainly concentrated on altcoins investors, which has a limited impact on holders who only hold BTC and ETH.
Early Tuesday, Cardano released the Node version 8.1.1 on the blockchain’s mainnet aimed at boosting network processes by reducing epoch transitions or time periods on the blockchain. ADA changed hands at $0.26 at press time, according to market data.