Celsius Network, a major crypto lending platform, recently made a significant announcement that could have far-reaching consequences for Cardano (ADA) and Dogecoin (DOGE). The company announced its plans to exclusively convert all altcoin reserves into Bitcoin (BTC) and Ethereum (ETH).
The decision has substantial implications for ADA and DOGE, as these two cryptocurrencies are among the largest assets held by Celsius. Currently, the company has reserves of 535,161 ADA and 1,505,693 DOGE.
Although Celsius did not explicitly state the reasons behind this move, speculation suggests that it may be related to the uncertain regulatory environment around certain tokens, including ADA. As a company recovering from bankruptcy, Celsius may seek to minimize exposure to regulatory scrutiny.
The liquidation plan could increase ADA selling pressure when Celsius relinquishes his holdings. As a result, this could put pressure on ADA prices temporarily, especially given their recent downward trend. Technical indicators show that bulls’ efforts to stimulate demand at $0.354 have proved ineffective, leading to a downward slope and ADA trading at $0.26.
Looking ahead, the Moving Average Convergence Divergence (MACD) suggests that selling pressure on ADA may persist. The MACD currently stands at -0.007, indicating that the 12-day exponential moving average (EMA) is below the 26-day EMA.
If the ADA fails to pull off the accumulated gains at $0.26, reversing its trajectory to the positive could be a challenge.
As for DOGE, the impact of Celsius Network’s liquidation plan will depend on their level of ownership and overall market sentiment. DOGE has experienced considerable volatility recently, as indicated by Bollinger Bands (BB). Moreover, DOGE has recently emerged from oversold territory, shifting its price away from the lower band.
Although DOGE’s price has fluctuated recently, the near-term outlook for the coin remains speculative. The Directional Movement Index (DMI) indicates a potential slope to the bearish side. Currently, +DMI is at 8.74, while -DMI is at 36.62. Comparing the high and low shows stronger downward pressure than upward momentum.
Adding to the bearish sentiment, the Average Directional Index (ADX), which is used to assess the strength of an uptrend or downtrend, supports the projected bearish outlook, with a value above 25. ADX currently sits at 42.74.
Celsius Network’s decision to focus solely on BTC and ETH could have significant consequences for ADA and DOGE. ADA may face selling pressure and potential price drops, while DOGE’s fate will hinge on broader market sentiment and Celsius holdings. The technical outlook for the ADA points to continued downward pressure, while the DOGE’s near term outlook remains speculative, with indicators showing a bearish slope. Market participants should closely monitor these developments as they unfold.