Cardano
Last Fed rate cut sent Cardano crashing 57% – what about now?
Published
2 months agoon
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adminCardano dropped 57% when the Federal Reserve cut rates back in 2019. With another rate cut on the horizon, the cryptocurrency faces a similar setup that could bring major downside.
Cardano prepares for September decline
In May 2019, the Federal Reserve initiated its first rate cut, lowering rates from 2.42% to 2.39%. Rates at that time were much lower than today, and the public debt stood at $22 trillion. Today, debt has increased to nearly $35 trillion, and interest rates now stand at 5.33%, more than double the 2019 levels.
When the rates started to fall in 2019, Cardano experienced a sudden drop. After a brief period of recovery, the downtrend continued for months until early 2020. An uptrend emerged later, but the market downturn during the COVID-19 pandemic coincided with further rate cuts. Despite uncertainties around the exact link between rate cuts and crypto declines, Cardano and the broader market saw a clear decrease in value.
A similar scenario could unfold today. Crypto has shown correlations with traditional finance in the past, including during the 2019 rate cut. The Federal Reserve’s upcoming meeting is likely to result in a rate cut based on CME data. If the market follows the 2019 pattern, Cardano could face a multi-month decline, which could last until the end of the year, before recovering in early 2025. A repeat of the previous trend could push Cardano’s price down to around $0.15.
Additionally, September has often proven to be a tough month for both stocks and crypto. In September 2020, during a halving year, Cardano also faced a downtrend. Coupled with the current 10% drop since the start of this month, these factors could drive Cardano toward a deeper fall in the weeks and months ahead below its 2022 support line at $0.2349.
Cardano’s bearish momentum grows with SRSI, MACD, and VRVP
Many traders focus on short-term movements, but stepping back for a longer-term view can give a better sense of the bigger picture. Cardano’s monthly Stochastic RSI (SRSI) and MACD are flashing warning signs that shouldn’t be ignored, and both are painting a rough picture for ADA.
The SRSI tracks momentum by looking at an asset’s price range over time. The scale goes from 0 to 100, with anything below 20 showing oversold conditions. Since March 2024, the SRSI has been sliding, and it’s now closing in on that oversold region.
The MACD, meanwhile, is showing similar bearish vibes. On the monthly chart, the MACD line has already crossed below the signal line, which is a sign of downward pressure. The histogram, which shows the gap between the two lines, is about to flip red, also pointing to a growing bearish momentum.
Alongside the bearish signals from the Stochastic RSI and MACD, the Visible Range Volume Profile (VRVP) adds even more negative pressure to the outlook. The VRVP shows where most trading volumes occurred at various price levels. In Cardano’s case, the volume bars within the current price range are quite thin, which indicates weak support. The biggest volume bar begins at the $0.15 level, suggesting a strong support zone there. Below the current price, there’s a gap in the volume profile, which means if Cardano continues to fall, there’s little trading activity to slow down the drop until it reaches that $0.15 zone.
Is Cardano’s 2022 support line strong enough to hold?
Despite the bearish indicators, a couple of factors could prevent Cardano from dropping sharply. At the moment, the price sits within a macro Fibonacci golden pocket, drawn from the all-time low to the recent high in March 2024. This zone, between $0.2951 and $0.3204, has acted as support for now. However, when looking at other Fibonacci retracements from different points, ADA has already fallen below the 78.6% retracement on every one of them. This could raise doubts about the strength of the current golden pocket, as there’s a possibility it may not hold up in the long term.
A stronger support level, however, lies at $0.2349, a line that was respected during the 2022 bear market. But, with ADA currently around $0.315, a drop to that support would still represent a 25% decline, which would be far from ideal.
Strategic considerations
In our view, there could be a dead cat bounce before the September 18 Fed meeting. However, after that, ADA is likely to face a 2-3 month downtrend until the Fed slows the pace of its rate cuts. A more cautious strategy would be to wait for ADA to drop below the $0.2951 golden pocket before shorting. This offers a safer entry point compared to shorting immediately right now, as Cardano could see a short-term uptrend while holding above the golden pocket. If the price falls below this level, shorting down to $0.2349 becomes a more calculated move.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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Cardano founder Charles Hoskinson Has Change of Heart for Bitcoin, Here’s Why
Published
2 weeks agoon
October 26, 2024By
adminCardano founder Charles Hoskinson recently had a change of heart about Bitcoin and believes that the BTC DeFi market will be bigger than the Solana and Ethereum markets in the future. His recent comments come nearly two months after Hoskinson said that “we don’t necessary need Bitcoin” and “I don’t see how Bitcoin survives”. But what’s causing this change of heart for Hoskinson? Probably, it’s the recent integration of the Cardano blockchain with the BTC blockchain.
Cardano founder Charles Hoskinson Turns Bullish on Bitcoin
In a groundbreaking integration a day before, the Cardano blockchain joined the Bitcoin network as a BitcoinOS Grail bridge. This move will open the decentralized finance (DeFi) market for the world’s largest asset class.
Following this development, Hoskinson said that he would re-launch the Bitcoin Education Project in 2025. Additionally, he plans to introduce Aiken education for BTC developers with key resources hosted on GitHub’s Hyperledger Identus repository.
Furthermore, Charles Hoskinson shared that with the implementation of Babel fees, BTC developers will be able to create hybrid Cardano-Bitcoin applications using Aiken and pay transaction fees in Bitcoin.
The Cardano founder said that this marks the beginning of DeFi on Bitcoin, and believes that it could surpass the achievements of both Solana and Ethereum in the future.
From BTC Bashing to Praising
Two months before, the Cardano founder created a major uproar in the crypto industry while criticizing BTC’s role in the industry. In a video that surfaced on social media, Hoskinson said that the crypto sector no longer needs BTC. Interestingly, he also believes that Cardano can flip Bitcoin and Ethereum in the long run.
“Bitcoin needs the industry to survive… But the industry doesn’t need Bitcoin anymore. I just don’t see how that survives. It’s a religion, its not an ecosystem. So no, we don’t necessary need Bitcoin,” he said.
However, what Hoskinson was particularly pointing out is that BTC needs to adapt to change, or else it could lose the first-movers advantage. Now that Bitcoin is taking a move further towards DeFi, Hoskinson seems to be excited again about the BTC ecosystem growth.
The Cardano founder has been also sharing his opinion on the recent political developments in the US. Earlier this week, he slammed Kamala Harris for calling Donald Trump Hitler.
Bhushan Akolkar
Bhushan is a FinTech enthusiast with a keen understanding of financial markets. His interest in economics and finance has led him to focus on emerging Blockchain technology and cryptocurrency markets. He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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ADA
Cardano Bullish Pattern Suggests A Breakout – Can ADA Reach $0.54?
Published
3 weeks agoon
October 17, 2024By
adminCardano (ADA) is crucial following days of heightened volatility and excitement among crypto investors. While other altcoins have experienced significant pumps, Cardano has yet to see the same breakout, leaving analysts and traders searching for confirmation of a bullish trend.
Despite the lack of a major move, optimism remains high for ADA as market watchers await a signal to ignite the rally.
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Top analyst and investor Carl Runefelt recently shared a technical analysis suggesting that Cardano could be on the verge of a bullish rally, potentially pushing ADA to $0.54.
This prediction has generated excitement within the Cardano community, but the next few days will be critical in determining whether ADA can follow through with a breakout.
As the market remains volatile, traders will closely monitor Cardano’s price action for signs of a confirmed uptrend.
Cardano Holding Above Key Level
Cardano is trading above a key resistance level at $0.33, sparking optimism among analysts and investors. This crucial price point could be the springboard that propels ADA to new highs.
Analysts in the crypto community believe that Cardano is poised for a breakout, and some expect a rally in the coming days.
Prominent investor and analyst Carl Runefelt recently shared a technical analysis on X, highlighting a bullish pattern forming on Cardano’s chart. According to Runefelt, if ADA manages to break this pattern to the upside, the next target could be as high as $0.54, representing a potential 58% gain from current levels.
This prediction has generated excitement, as ADA holders are looking for signs of a sustained upward trend after a period of consolidation.
However, not all scenarios point to a smooth ride for Cardano. If ADA fails to break above this pattern, further consolidation or a potential correction could be on the horizon.
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The $0.33 level is now a key marker for traders and investors to watch closely in the coming days, as it could signal the beginning of a major price move—or the continuation of a more uncertain path for Cardano.
ADA Technical Analysis
Cardano’s (ADA) price action has been underwhelming compared to other altcoins. Currently trading at $0.34, ADA has seen a 7% decline from its recent high of $0.37 set on Tuesday. Despite some volatility, the price remains below the critical 200-day exponential moving average (EMA) at $0.40, following a failed breakout attempt in late September.
For the bulls to regain control, ADA must reclaim the $0.40 level and push toward setting a new local high above $0.41. A breakout above these levels would signal a potential momentum shift and spark renewed optimism among investors.
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However, exceeding the $0.34 mark could lead to further downside pressure. If this level is lost, a correction to lower demand areas around $0.30 is expected. Traders are watching closely, as this level could determine whether Cardano will continue to underperform or regain its footing in the market.
Featured image from Dall-E, chart from TradingView
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