ADA's golden cross breakout gets caught in the geopolitical whirlpool

Cardano (ADA) has broken above $0.39 after breaking a multi-month descending wedge, but the broader market risk sentiment deterioration threatens the technical bullish outlook.

This seventh-largest cryptocurrency by market cap just completed its first golden cross of the year, yet it has fallen into trouble amid escalating geopolitical tensions. ADA dropped 5.15% during Wednesday’s trading, perfectly illustrating why relying solely on technical analysis often isn’t enough to grasp the full story.

On-Chain and Spot Traders’ Battle

The 9-day and 26-day moving averages of ADA experienced a golden cross at the $0.338 level, a technical signal typically indicating sustained upward momentum. Along with this golden cross, trading volume surged 31% to $614 million, showing institutional funds are participating in this breakout attempt.

The technical signals are quite positive. The MACD histogram shows bullish momentum reaching 0.0082, and the Relative Strength Index (RSI) remains in neutral territory at 51.15, leaving ample room for further gains without entering overbought conditions. More importantly, ADA’s position within the Bollinger Bands at 0.71 indicates the price is moving toward the upper band but hasn’t shown signs of weakening.

Since mid-October last year, the downward wedge that had been trapping the price has been successfully broken, marking an important milestone for technical traders. Based on the measured move of this pattern, the initial target points to $0.44, with the 50-day moving average at $0.40 serving as a near-term resistance.

Derivatives Market Reveals Institutional Sentiment

Futures market data shows seasoned traders are accumulating long positions. The open interest in ADA derivatives has surged to $851 million, the highest level since mid-December. The long-to-short ratio stands at 1.06, with 54.73% of positions betting on price increases.

Industry analysts note that this whale-driven accumulation pattern resembles the prelude to ADA’s 340% rally at the end of 2024. Funding rates have turned positive, and historical experience suggests that when long-term holders reduce activity, it often signals an impending rebound.

However, skepticism remains. Recent global geopolitical tensions have supported the US dollar, leading to a decline in risk appetite across the entire crypto market. These macro factors are enough to undermine the carefully constructed technical bullish setup.

Support and Resistance Levels Determine Short-Term Direction

The current battleground is at the $0.40 level, which coincides with the 50-day moving average and the wedge breakout point. If ADA can hold this level steadily, the next target is $0.42 (the upper Bollinger Band), followed by a potential push toward the measured wedge target of $0.44.

Bearish traders are watching the $0.33 support level. If broken, the golden cross signal would be invalidated, and the price could retest the 52-week lows. The daily true range is $0.02, indicating moderate volatility, but if geopolitical risks escalate, volatility could spike rapidly.

For bulls, establishing positions near the current price, setting stop-loss below $0.33, and aiming for an initial target of $0.42 offers a relatively favorable risk-reward profile. Conservative traders may wait for a clear breakout above $0.40 before entering. Shorts should watch for failure at the $0.40 resistance, which could indicate a false breakout, with prices potentially falling back to the mid-term $0.30 level within the next two weeks.

Critical Moment Approaching

ADA’s technical breakout is facing a stern test from worsening risk sentiment. The next 48 hours could reveal whether bulls can maintain control above $0.40. While the golden cross provides a solid technical foundation, macro headwinds suggest any rebound might be suppressed around $0.44 unless market sentiment improves. Keep a close eye on $0.40—any clear breakout in either direction will set the tone for ADA’s end-of-month trajectory.