• ADA is losing grip on the $0.38 level and coming under selling pressure in tandem with broader cryptocurrency markets.
• The latest US inflation report has triggered fears that the Fed might have to raise interest rates higher for longer, hence the risk-off reaction in crypto and traditional asset classes.
• Cardano is currently testing an uptrend line and its 50DMA at $0.37, but if it breaks above its 200DMA at $0.3815 then a retest of recent highs in the $0.42 area would become more likely.
ADA Price Forecast
ADAs price is under pressure after a hotter-than-expected US inflation report was released earlier on Friday which revealed a larger-than-expected jump in MoM core inflation to 0.6% from 0.4% in December, which was also revised higher from the previous estimate of 0.3%. This data has triggered fears that the Fed might have to raise interest rates higher for longer, hence weighing down on cryptocurrencies like ADA and traditional asset classes alike.
Technical Analysis
At this time, ADA is testing an uptrend line that has been in play since the end of 2022 along with its 50DMA just under $0.37; if it breaks below this trend line then a drop back to a recent double bottom in the $0.35 area seems likely however if bulls regain control of price action and push ADA to close Friday’s session back above its 200DMA at $0.3815 then a retest of recent highs near$ 042 could be expected instead..
Outlook for Cardano (ADA)
The Cardano ecosystem will continue to grow due to its large and dedicated community of supporters and developers who continue launching useful new protocols such as Djed – an overcollaterized algorithmic stablecoin . Whether or not Cardano reaches $3 depends largely on how cryptocurrency markets recover from last year’s highly oversold levels as well as whether or not there are any rate cuts before year end which could help bolster investor exuberance towards crypto assets once again..
Risk Factors
It should be noted that US inflation remains sticky at elevated levels while economy continues humming along nicely; with these factors combined it’s likely we will see 3 more Fed rate hikes before 2023 ends which could cap any significant gains made by ADA during this period as investors remain wary of rising yields and increased borrowing costs..
Conclusion
In conclusion, although Cardano’s ecosystem will almost certainly continue growing throughout 2023 thanks to its active development community; reaching the lofty heights some investors may expect ($3) may still prove difficult given current economic conditions coupled with further rate hikes expected by year end..