Cardano has been one of the notable cryptocurrencies to watch in recent weeks. The price surged to a seven-month high, breaking past previous resistance levels and creating new optimism among investors. However, this newfound bullish momentum comes with potential risks, primarily due to the increasing dominance of short-term investors.

In the last two weeks, short-term holders—those who typically keep their positions for less than a month—have risen significantly. Their share of ADA holdings has grown from 14% to 18%, signaling that more investors are now poised to sell during periods of volatility. Short-term activity could cause selling pressure that may challenge Cardano’s ability to maintain its current price levels, especially if profit-taking begins to accelerate.

Despite this, the broader market sentiment remains relatively optimistic, and Cardano’s chart provides an interesting development. The growing dominance of short-term investors could indicate that ADA is reaching a temporary market top, but this needs to be monitored closely in the coming days.

Technical Indicators: The Golden Cross

From a technical perspective, Cardano is undergoing a critical shift. The cryptocurrency’s 50-day Exponential Moving Average (EMA) has crossed above the 200-day EMA, forming a Golden Cross. This formation is generally regarded as a highly bullish signal, indicating the potential for a sustained price increase. The Golden Cross suggests that Cardano may be transitioning from a long period of underperformance into a more bullish phase, marking the end of the six-month downtrend that began with the Death Cross.

This technical signal represents a positive shift in investor sentiment, as it is often followed by significant price growth. Historically, Golden Crosses have been associated with strong rallies, though the asset’s ability to capitalize on this momentum will depend on broader market conditions and investor behavior.

ADA Price Levels and Market Expectations

At the time of writing, Cardano’s price is trading at $0.58. If the bullish momentum holds, ADA could target $0.62 as its next resistance level. A successful breakout above $0.62 would set the stage for a more significant rally, potentially driving the price up to $0.66, further solidifying the asset’s position in the market.

However, if Cardano fails to hold above $0.59, there are risks of a downside reversal. A decline below $0.59 could push ADA back toward $0.54. Should this level fail to provide adequate support, a further drop to $0.51 would significantly weaken the bullish outlook for Cardano.

The Role of Investor Sentiment

Investor sentiment is a key factor in Cardano’s near-term price action. While the long-term technical outlook remains positive, short-term fluctuations in market sentiment could lead to volatility. If the influx of short-term investors leads to significant selling pressure, ADA could experience short-term setbacks, despite the broader positive trend signaled by the Golden Cross.

The recent rally suggests that Cardano is poised for an upward trajectory, but it is essential to closely monitor both technical indicators and investor sentiment. The market remains volatile, and while the Golden Cross is a bullish sign, it may not guarantee a smooth upward path if short-term selling pressure intensifies.

Conclusion: Can Cardano Sustain Its Momentum?

Cardano’s Golden Cross marks an important milestone for ADA, signaling the potential for significant long-term growth. However, the presence of growing short-term investor activity raises questions about the sustainability of this momentum. ADA’s ability to maintain its current price levels will depend on whether short-term selling pressure can be absorbed by the broader market’s bullish sentiment.

For Cardano to continue its upward trajectory, it must first clear key resistance levels, particularly $0.62, and sustain price support above $0.59. If these levels are maintained, ADA could see continued growth toward $0.66. However, failure to hold above these support levels may see the price revisiting the lower ranges of $0.54 or $0.51, putting the bullish outlook in jeopardy.