The recent market calm following the Israel-Iran ceasefire has given way to cautious trading. Among the top 100 cryptocurrencies, only a few, like PI Coin and Maple Finance, posted gains exceeding 10%, while average movements hovered around 2% in either direction. This reflects a broader wait-and-see approach among investors.
Despite the subdued activity, buying interest persists. The total cryptocurrency market capitalization edged up by 0.81% over the past 24 hours, reaching $3.283 trillion.
Traditional financial markets remained stable. The S&P 500 saw a minor increase of 0.07%, closing at 6097 points. The Federal Reserve maintained its benchmark interest rate within the 4.25%–4.5% range. Chair Jerome Powell emphasized a patient stance, indicating the central bank would await clearer economic signals before considering policy shifts.
Looking ahead to June, analysts from prediction platform Myriad suggest the Nasdaq may outperform the S&P 500.
Amid the overall market steadiness, two assets stood out: Bitcoin Cash (BCH) and Cardano (ADA). Their contrasting performances captured trader attention, offering excitement in an otherwise quiet period.
Bitcoin Cash (BCH) Technical Breakout
Bitcoin Cash, often regarded as Bitcoin’s first major fork, impressed with a 6% surge to $481.30. This move decisively broke through the $470 resistance level, which had capped prices for much of the month. The breakout is particularly significant given high trading volumes and multiple bullish technical indicators.
The Relative Strength Index (RSI) sits at 61, indicating strong bullish momentum without entering overbought territory. This suggests buyers remain in control, with potential for further gains before reaching the 70 level, where profit-taking often occurs. An RSI between 50 and 70 is generally considered positive, reinforcing confidence in the current uptrend.
The Average Directional Index (ADX), currently at 20, remains below the 25 threshold that confirms a strong trend. However, its gradual upward movement signals growing momentum and potential for a more definitive breakout. Note that ADX measures trend strength, not direction—readings above 25 indicate a new trend is forming.
BCH trades well above both its 50-day moving average (around $385) and 200-day moving average (approximately $352), creating a significant gap. This alignment signals a robust and potentially sustained upward trend. The 50-day MA resting above the 200-day MA further suggests short-term momentum outperforming longer-term trends, reflecting positive market sentiment.
Additionally, the Squeeze Momentum Indicator shows an "on" state with upward pointing signals, indicating that a period of price consolidation is breaking upward. This tool often identifies when markets are about to enter high volatility after calm periods. While not conclusive, the "on" state serves as a warning: a major breakout—or pullback—could be imminent.
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Overall, BCH exhibits a clear uptrend, though some conflicting technical signals suggest lingering market hesitation. The current price range represents a critical psychological test for both bulls and bears.
Cardano (ADA) Faces Downward Pressure
During a recent livestream, Cardano founder Charles Hoskinson proposed an intriguing idea: using nearly $100 million from the Cardano treasury to purchase a basket of stablecoins, Bitcoin, and other synthetic assets.
This proposal can be interpreted in several ways. Positively, it aims to boost liquidity within Cardano’s decentralized finance (DeFi) ecosystem while promoting decentralization—key to sustainable growth. However, it also raises questions about whether the development team is losing confidence in ADA, the network’s native token, which hasn’t seen a clear growth cycle since 2021.
Market reaction over the past 24 hours suggests skepticism prevails. ADA price fell 3.5% to $0.5669, with several technical indicators flashing warning signs.
The RSI dropped to 35, nearing the oversold region below 30. While not entirely oversold, such low RSI levels indicate increasing selling pressure. Although oversold conditions can sometimes trigger technical rebounds, the current weak momentum suggests the downtrend may continue. An RSI below 40 typically signals bearish dominance, especially when accompanied by other negative indicators.
The ADX reached 26—a level indicating a strong trend is developing. However, a high ADX during a downward price movement reinforces bearish momentum. This is why analysts always contextualize ADX with price direction: high ADX during a decline often means weakening momentum.
ADA is now trading below both its 50-day and 200-day moving averages—a concerning signal for short- and mid-term prospects. When short-term averages fall below long-term ones, it often indicates persistent selling pressure and declining investor confidence.
Finally, the Squeeze Momentum Indicator is in an "off" state with negative momentum, suggesting that a recent consolidation phase has broken downward. The price action has compressed negatively, and the current trend is likely to continue in the near term.
Frequently Asked Questions
What caused Bitcoin Cash’s recent price surge?
BCH broke through a key resistance level at $470 with high trading volume and supportive technical indicators. This indicates renewed investor confidence and potential continued upward momentum.
Why is Cardano’s treasury proposal affecting its price?
The proposal to diversify treasury assets into other cryptocurrencies raised concerns about the development team’s confidence in ADA, contributing to selling pressure and negative market sentiment.
How do moving averages influence market trends?
When short-term moving averages cross above long-term ones, it signals bullish momentum. Conversely, when they drop below, it often indicates bearish trends and loss of investor confidence.
What does the Squeeze Momentum Indicator reveal?
It identifies periods of low volatility followed by high volatility breakouts. An "on" state suggests a potential significant price move, either up or down, is imminent.
How should traders interpret RSI readings?
RSI values between 50-70 suggest bullish momentum, while readings below 40 often indicate bearish dominance. Levels above 70 may signal overbought conditions, while those below 30 suggest oversold markets.
What broader factors are influencing cryptocurrency markets?
Macroeconomic events, Federal Reserve policies, and traditional market performances all impact crypto markets. Currently, stable traditional indices and steady interest rates contribute to cautious crypto trading.