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 plan to exclusively convert all its altcoin reserves into Bitcoin (BTC) and Ethereum (ETH).
The decision holds substantial implications for ADA and DOGE, as these two cryptocurrencies were among the largest assets held by Celsius. Currently, the firm holds 535,161 ADA and 1,505,693 DOGE in its reserves.
Although Celsius did not explicitly state the reasons behind this move, speculation suggests that it could be related to the uncertain regulatory environment surrounding certain tokens, including ADA. As a company recovering from insolvency, Celsius might strive to minimize exposure to regulatory scrutiny.
The liquidation plan could increase selling pressure for ADA when Celsius offloads its holdings. Consequently, this may temporarily suppress the price of ADA, particularly considering its recent downtrend. Technical indicators indicate that bulls’ attempts to stimulate demand at $0.354 have proven ineffective, leading to a downward slope and ADA trading at $0.26.
Furthermore, the Moving Average Convergence Divergence (MACD) suggests that the selling pressure on ADA might persist. The MACD currently stands at -0.007, indicating that the 12-day exponential moving average (EMA) is below the 26-day EMA.
If ADA fails to attract increased accumulation at $0.26, reversing its trajectory to a positive one could become challenging.
As for DOGE, the impact of Celsius Network’s liquidation plan will depend on the extent of their holdings and overall market sentiment. DOGE has experienced considerable volatility recently, as indicated by the Bollinger Bands (BB). Furthermore, DOGE has just exited an oversold region, shifting its price away from the lower band.
Although DOGE’s price has fluctuated recently, the short-term outlook for the coin remains predominantly speculative. The Directional Movement Index (DMI) suggests a potential tilt toward the bearish side. Currently, the +DMI stands at 8.74, while the -DMI is at 36.62. Comparing highs and lows indicates a stronger downward pressure than upward momentum.
Adding to the bearish sentiment, the Average Directional Index (ADX), used to assess the strength of an uptrend or downtrend, supports the projection of a bearish outlook, with a value above 25. The 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 dampening, while DOGE’s fate will depend on broader market sentiment and Celsius’ holdings. The technical outlook for ADA indicates continued downward pressure, while DOGE’s short-term prospects remain speculative, with indicators suggesting a bearish tilt. Market participants should closely monitor these developments as they unfold.
