The Input-Output Global (IOG), the organization responsible for the development and maintenance of Cardano network, along with other foundations behind Solana (SOL) and Polygon (MATIC), found themselves in a dispute with the United States Securities and Exchange Commission (SEC) following last week’s allegations. The regulator claimed that ADA, SOL, and MATIC, among other crypto tokens, are securities. Since the allegations, ADA has suffered a massive loss of about 25%, while SOL and MATIC each declined by nearly 29%.
In response to the allegations, the foundations have released statements in the past few days focused on improving investor confidence. They have made it clear that they are willing to fight the allegations to clear the tokens. Cardano’s IOG has been adamant that the SEC’s claims contain “numerous factual inaccuracies” and will have no impact on IOG’s operations.
IOG staunchly maintained that ADA is not a security under U.S. securities laws. They argue that understanding the intricacies of decentralized blockchains is crucial for creating responsible legislation. According to them, the SEC’s “regulation through enforcement” approach is misguided and strips the industry of much-needed clarity and certainty.
Meanwhile, the Cardano price has recovered, trading at $0.281 on Monday after sinking to $0.22. It boasts an impressive 6% uptick within 24 hours, with the Relative Strength Index (RSI) currently in oversold territory. This suggests that bulls could capitalize on the improving technical outlook and close the gap to $0.36 and $0.4.
Although the price recovery looks promising, traders should proceed with caution as Cardano’s price is now trading below all major applied moving averages, such as the 200-day Exponential Moving Average (EMA), the 100-day EMA, and the 50-day EMA. A sell signal observed with the Moving Average Convergence Divergence (MACD) might negate the recovery, causing ADA’s price to fluctuate between $0.22 and $0.28.
However, bulls still have a fighting chance for gains beyond $0.4 and toward $1 as long as the short-term support at $0.25 and major support at $0.22 remain above current buyer congestion areas. The next buy signal from the momentum indicator will manifest when the MACD line in blue crosses above the signal line in red.
As the foundations behind Cardano, Solana, and Polygon continue to combat the SEC’s allegations, it is essential for investors to remain vigilant and monitor the situation closely. While their operations are not currently impacted by the SEC’s claims, the resulting market fluctuations and uncertainty require cautious decision-making and ongoing analysis of market developments.
Source: Coingape
