The new year has presented Cardano (ADA) with a conflicting technical picture. On January 5, the cryptocurrency formed what is traditionally considered a bullish pattern: its 9-day moving average crossed above its 26-day average at $0.34, an event known as a “golden cross.” However, this potential buy signal is being challenged by weakening momentum indicators and precarious support levels, raising doubts about its reliability.
Momentum and Market Sentiment Tell a Different Story
Beneath the surface of this ostensibly positive chart formation, underlying metrics paint a more cautious picture. The Relative Strength Index (RSI) currently reads 33.85, indicating ADA is approaching oversold territory—a stark contrast to the optimism a golden cross typically implies. Trading activity has surged, with a 31% increase in 24-hour volume to approximately $788 million, which often signals heightened market uncertainty rather than conviction.
The immediate technical hurdles are clear. For the golden cross to gain any real credibility, ADA must decisively break through resistance levels at $0.36 and $0.38. Conversely, a drop to the next support at $0.33 would quickly invalidate the positive chart pattern.
Broader Altcoin Market Remains Subdued
The wider context offers little immediate relief for ADA. The Altcoin Season Index sits at a meager 19 out of 100, firmly indicating the market remains in a “Bitcoin Season.” Bitcoin itself continues to dominate, trading above $87,000. Some analysts, like João Wedson of Alphractal, draw parallels to previous cycles in 2019 and 2022, where altcoins held key supports while Bitcoin consolidated above critical levels before a subsequent catch-up rally began.
Should investors sell immediately? Or is it worth buying Cardano?
Nevertheless, fundamental concerns persist. Galaxy Digital CEO Mike Novogratz has emphasized that Cardano must demonstrate tangible use cases and sustainable business models to justify its position. While its market capitalization of around $13 billion keeps it within the top ten cryptocurrencies, competition from faster smart-contract platforms is intensifying.
Ecosystem Developments Amid Security Concerns
Cardano’s development continues apace. Its privacy-focused Midnight sidechain has progressed to its next phase. However, the start of January also saw a rise in reports of phishing attacks targeting Cardano wallet users, serving as a community security warning.
A high staking ratio reduces immediate selling pressure but also locks up liquidity. The key question for 2026 is whether scaling solutions like the Hydra protocol can successfully attract developers and users. Without measurable adoption, even a technically valid golden cross may prove to be a short-lived rally.
The range of potential outcomes is wide. Scenarios vary from a prolonged consolidation between $0.30 and $0.80 to more optimistic targets near $2, entirely dependent on Cardano’s ability to translate its technological roadmap into genuine ecosystem growth and user adoption.
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