Cardano price sees traders forfeit on $0.300 to settle for a lower valuation - ELEVENEWS
Cardano price is flirting with a break below $0.300. ADA does not see a Christmas rally as headwinds mount after Fed Chair Jerome Powell comments. Best case losses will be contained toward 11%, worst case 35%...
- Cardano price is flirting with a break below $0.300.
- ADA does not see a Christmas rally as headwinds mount after Fed Chair Jerome Powell comments.
- Best case losses will be contained toward 11%, worst case 35% by year-end.
Cardano (ADA) price action is facing headwinds after the champagne corks were put back on the bottles after the Fed FOMC rate decision and the press conference by Jerome Powell on Wednesday. Powell delivered a harsh message to the markets that a slower increment of hikes, from 75 basis point to 50 basis points, is granted, but he repeated that markets are too enthusiastic about what could follow next. Markets already priced in rate cuts as of July 2023, while Powell alluded to possibly continuing hikes during 2023. These diverging threads could only grow further if the ECB this Thursday afternoon underdelivers and spark another round of US Dollar strength that could snap ADA support like a twig.
ADA support too thin for the ECB
Cardano price is thus facing headwinds as central banks do not look ready yet to bring out the champagne and caviar. The euphoria after the negative US CPI number quickly disappeared after the Fed’s rate decision on Wednesday evening. To make matters worse, several industrial production numbers out of the eurozone point to an European Central Bank (ECB) that has its hands tied and might only hike a slim 50 basis points and stop there in order not to break the fragile economic balance at the edge of a severe recession.
ADA thus sees no one standing up against the US Dollar, which has been weakening the past few weeks in the idea that the ECB would catch up to the Fed in its number of rate hikes. The fact that the US economy and industry are in much better shape than their European counterparts makes the US Dollar more valuable than other currencies. Cardano price could break below $0.297 this afternoon if the ECB disappoints and could go to $0.265 at the monthly S1 and the low of December 24, 2017.
ADA/USD daily chart
The above paragraph is the good scenario, which limits the losses for now, as another scenario would be even worse. With the Bank of England and the ECB coming out today, risk at hand comes in the form of both possibly undershooting expectations. Both EUR/USD and GBP/USD could start tanking, triggering US Dollar strength that spills over into cryptocurrencies as a head wind. Expect with that to see traders peel out of cryptocurrencies, and ADA could hit $0.200 or $0.194 on the downside, a 35% decline for the last weeks of 2022.
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