- ADA trades between key moving averages, with a breakout or breakdown likely depending on ETF news and volume shift.
- Bollinger Bands narrow while volume stays flat, indicating low volatility and market indecision.
- SEC’s ETF ruling on May 29 could drive volatility, with ADA stuck between $0.742 support and $0.7742 resistance.
At press time, Cardano (ADA) was trading at $0.75 with a slight dip of over 1% as of Wednesday. This movement comes ahead of a key decision by the U.S. Securities and Exchange Commission (SEC) on May 29.
The SEC is expected to rule on the Grayscale ADA Exchange Traded Fund (ETF) application, previously extended by 45 days from the April 14 deadline, according to the agency’s March 11 filing.
As anticipation grows, market volatility increases, although ADA continues to hold near key technical levels. The possibility of another extension remains, especially after the SEC postponed the Cboe’s application for the Fidelity Solana Fund by an additional 45 days.
Price Consolidates as Volatility Declines
ADA currently trades between the 20 day simple moving average of $0.7742 and the lower Bollinger Band at $0.7138. The price remains inside the Bollinger Band channel, showing no decisive movement in either direction.
ADA/USDT 1- day price chart, Source: TradingView
A narrowing of the bands through late May suggests reduced market volatility. Furthermore, the Accumulation/Distribution (A/D) line is at 51.68 billion and has held flat since April, indicating neutral sentiment in the market. Volume is steady at around 24.99 million, suggesting limited buying or selling momentum.
Support has been tested and held near $0.7138 multiple times since April. On the upside, resistance is firmly set at $0.8345, which previously capped gains in mid May. ADA needs to reclaim the 20 day SMA with stronger volume for any upside breakout to materialize.
Moving Averages Hint at a Volatile Setup
ADA’s price also fluctuates between two major moving averages, trading just above the 200 day MA at $0.742 and slightly below the 50 day MA at $0.764. This narrow gap creates a classic moving average squeeze.
ADA price dynamics, Source: TradingView
Historically, such patterns have led to increased price movement. ADA briefly traded above both MAs in May but failed to hold the momentum. Volume has decreased since mid May, further indicating the ongoing indecision.
Despite the slow price action, ADA has formed higher lows since early May. This suggests a gradual shift in sentiment after the steep declines between March and April. The next move depends on whether the price breaks above the 50 day MA or slips below the 200 day MA.
ETF Decision Adds to Uncertainty
The SEC’s recent delay in other ETF rulings adds to expectations of another extension. However, this has also led to uncertainty around short-term movements. The price continues to trade near support while failing to generate momentum above key resistance.
Without a clear breakout or breakdown, ADA’s path remains restricted. ETF decision and volume trends might confirm the next direction. A sustained move outside the current range could lead to a new trend.
May 29th Potential Scenarios and Outlook
A bullish breakout above $0.7742 may send ADA toward $0.7950–$0.8050. A bearish drop below $0.742 could push it to $0.7250–$0.7150. ADA holds within a tight range between major moving averages and Bollinger Band levels.
Volume remains subdued and the A/D line flat. With the ETF decision due on May 29 and a recent history of SEC delays, volatility may rise. ADA’s direction will likely depend on volume shifts and any breakout from the current consolidation pattern.
