Cardano Market Update: DMA50 may stop ADA/USD recovery

Cardano (ADA) bottomed at $0.1023 and has been recovering ever since. The coin on the way to have its fifth green candle in succession as the bullish trend is gaining traction. At the time of writing, ADA is changing hands at $0.1238. The coin has gained nearly 8% in the recent 24 hours and stayed unchanged on a week-on-week basis.

Cardano's stablecoin may be coming soon

Cardano founder Charles Hoskinson said that he was obsessed with what was going on in the DeFi universe and hinted that IOHK may launch an algorithmic stablecoin that will leave  MakerDAO in the dust. Speaking on YouTube on Sunday, August 30, Hoskinson explained that the team would officially announce its DeFi-related plans a bit later. 

We’ve partnered with Emrugo, and we're right now working on the logistics of a stablecoin with them that we're going to be building first on Ergo to verify everything works correctly, and then we'll pull it over into Cardano and this is going to be an algorithmic stablecoin. We think it'll be significantly better than MakerDAO.

The new endeavors of Cardano team might have added fuel to ADA's bullish trend; however, the technical picture implies that the correction may be under way.

ADA/USD: The technical picture

On a daily chart, ADA/USD recovery is limited by $0.1260. This local barrier is reinforced by the middle line of the Bollinger Band; however, the critical resistance comes at $0.1300 with the daily SMA50 located above this level. It may stop ADA's recovery and trigger the sell-off towards the lower boundary of the recent upside-looking channel at $0.1000. 

ADA/USD daily chart